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Suppose you are considering buying a stock. The stock is currently trading for $25. You expect the price in one year to be $22
Suppose you are considering buying a stock. The stock is currently trading for $25. You expect the price in one year to be $22 and it will pay a dividend of $1.00. What is the stock's total expected return? What portion of the total return is from the dividend yield and what portion is from capital gains? LO4 O Total return -8.0%, dividend yield = 4%, and capital gains = -12.0%. Total return = 10%, dividend yield = 7.5%, and capital gains = 2.5%. Total return -12%, dividend yield 4%, and capital gains = -8.0%. O Total return = 12.5%, dividend yield = 8.5%, and capital gains = 4.0%.
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