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Monday, 18 November 2019

Suppose a stock had an initial price of $84 per share, paid a dividend of $1.50 per share during the year, and had an ending share price of $92.

Compute the percentage total return, dividend yield, and capital gains yield.
Suppose a stock had an initial price of $84 per share, paid a dividend of $1.50 per share during the year, and had an ending share price of $92.
What was the dividend yield and the capital gains yield?

Explanation
The dividend yield is the dividend divided by the beginning of the period price, so:


Dividend yield = $1.50/$84
Dividend yield = .0179, or 1.79%


And the capital gains yield is the increase in price divided by the initial price, so:


Capital gains yield = ($92 – 84)/$84
Capital gains yield = .0952, or 9.52%

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