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Mr. Gray invested in some Microsoft stocks when they were priced at $24.30. Market report indicated...

Mr. Gray invested in some Microsoft stocks when they were priced at $24.30. Market report indicated that Microsoft stocks have since made a dividend yield of 3.3% and total percentage return of 19.39%. What is the current price of an Microsoft share today?

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Answer #1

Mr. Gray invested in some Microsoft stocks when they were priced at $24.30. Market report indicated that Microsoft stocks have since made a dividend yield of 3.3% and total percentage return of 19.39%. What is the current price of an Microsoft share today?

Total percentage return = Dividend yield + Capital gain yield

19.39% = 3.3% + Capital gain yield

Capital gain yield = 16.09%

- Capital Gain yield

Initial Stock price (P0) = $ 24.30

3.90987 = P1 - 24.30

P1 = $ 28.21

So, the current price of an Microsoft share today is $ 28.21

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