Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that you bought 100 shares of ABC Inc., for $25 per share exactly one year ago. You have just received $1.50 in dividends, and

image text in transcribed
image text in transcribed
Suppose that you bought 100 shares of ABC Inc., for $25 per share exactly one year ago. You have just received $1.50 in dividends, and the current share price is $30 per share. (7 marks total) a. Calculate the cash income component of your investment return on ABC shares. (1 mark) h. Calculate the capital gain/loss component of your investment return on ABC shares. (1 mark) c. Calculate the dividend yield on ABC shares. (1 mark) d. Calculate the capital gains yield on ABC shares. (1 mark) e. Calculate the total percentage return on ABC shares. (1 mark) f. If you keep your ABC shares, should you still consider the capital gain/loss as part of your investment return, or as simply a "paper" gain? Explain? (2 marks)

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

Personal Financial Planning

Authors: Lewis J. Altfest

2nd edition

1259277186, 978-1259277184

More Books

Students also viewed these Finance questions

Question

=+a) What is the minimax choice?

Answered: 1 week ago