Question
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $2 per share and sells
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $2 per share and sells for $59.
a.What is the total rate of return on the stock?(Enter your answer as a whole percent.)
b.What are the dividend yield and percentage capital gain?(Enter your answers as a whole percent.)
c.Now suppose the year-end stock price after the dividend is paid is $44. What are the dividend yield and percentage capital gain in this case?(Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)
d.Is there any change in the dividend yield calculated in parts (b) and (c)?
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