Question

Suppose a stock had an initial price of $87 per share, paid a dividend of $2.15 per share during the year, and had an ending share price of $78. a. Compute the percentage total return. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What was the capital gains yield? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage total return Dividend yield Capital gains yield c. Dru52

Answer 1

	Capital loss=78-87
		=-$9
a)	Percentage of total return = (Dividend + capital loss)/ Initial price
			= (2.15 +-$9)/87
			=-6.85/87
			=-7.87%	(negative)
b)	Dividend yield = Dividend / initial price
		=$2.15/87
		=2.47%
c)	Capital gain yield = Capital loss / initial price
		=-$9/87
		-10.34%	(negative)