Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per share and sells

A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per share and sells for $78.

a. What is the total rate of return on the stock?(Enter your answer as a whole percent.)

Rate of return %

b. What are the dividend yield and percentage capital gain?(Enter your answers as a whole percent.)

Dividend yield %
Capital gains yield %

c.

Now suppose the year-end stock price after the dividend is paid is $69. 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.)

Dividend yield %
Capital gains yield %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Management

Authors: Geert Bekaert, Robert Hodrick

3rd edition

1107111820, 110711182X, 978-1107111820

More Books

Students also viewed these Finance questions