Question
A stock is selling today for $25 per share. At the end of the year, it pays a dividend of $2 per share and sells
A stock is selling today for $25 per share. At the end of the year, it pays a dividend of $2 per share and sells for $28.
Required:
a. What is the total rate of return on the stock?
b. What are the dividend yield and percentage capital gain?
c. Now suppose the year-end stock price after the dividend is paid is $21. What are the dividend yield and percentage capital gain in this case?
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International Financial Management
Authors: Geert Bekaert, Robert J. Hodrick
4th International Edition
013284298X, 9780132842983
