Question

# Suppose a stock had an initial price of \$87 per share, paid a dividend of \$2.15...

 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 \$98. a) Compute the percentage total return b) What was the dividend yield? c) What was the capital gains yield?

Given :

Current Price (Po) = \$87

Dividend received during the year (D) = \$2.15

Year end Price (P1) = \$98

a) Calculation of Percentage total return

Percentage total return = (D + P1 - Po) / Po *100

Percentage total return = (\$2.15 + \$98 - \$87)/ \$87 *100 = 13.15 / 87 *100 = 15.1149 %

Percentage total return = 15.11 %

b) Calculation of Dividend Yield

Dividend Yield = D / Po *100

Dividend Yield = \$2.15 / \$87 *100 =  2.4713%

Dividend yield = 2.47%

c) Calculation of Capital gain yield

Capital gain yield = (P1 - Po) / Po *100

Capital gain yield = (\$98-\$87) / \$87 *100 = 12.6437%

Capital gain yield = 12.64%

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