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Q6: Consider the following price and dividend data for Tata Motors: Date Price ($) Dividend ($) December 31, 2013 157.4 January 27, 2014 144.5 1.2

Q6:

Consider the following price and dividend data for Tata Motors:

Date

Price ($)

Dividend ($)

December 31, 2013

157.4

January 27, 2014

144.5

1.2

April 29, 2014

101.4

1.0

July 30, 2014

117.4

1.1

October 29, 2014

90.2

1.3

December 30, 2014

87.2

(A) Assume that you purchased Tata Motors stock at the closing price on December 31, 2013 and sold it after the dividend had been paid at the closing price on January 27, 2014. What is your dividend yield for this period? You need to show your calculations. (1 mark).

(B) Assume that you purchased Tata Motors stock at the closing price on December 31, 2013 and sold it after the dividend had been paid at the closing price on January 27, 2014. What is your capital gains rate (yield) for this period? You need to show your calculations. (1 mark)

(C) Assume that you purchased Tata Motors stock at the closing price on December 31, 2013 and sold it after the dividend had been paid at the closing price on January 27, 2014. What is your total return rate (yield) for this period? You need to show your calculations. (1 mark)

(D) Assume that you purchased Tata Motors stock at the closing price on December 31, 2013 and sold it at the closing price on December 30, 2014. What is your realized annual return for the year 2014? You need to show your calculations. (2 marks)

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