If you bought a stock one year ago for$51.78 per share and sold it today for$57.42 per share. It paid $1.74 per share dividend today. If you assume that the stock fell $9.79 to $41.99 instead.
a. Is your capital gain different? Why or why not?
b. Is your dividend yield different? Why or why not?
a. Is your capital different? Why or why not?
A. Yes,my capital gain will be different because I am selling out my shares in loss, so I would be making a capital loss rather than capital gain.
it is because the price of sales is lower than the price of purchase so there would be a capital depreciation and I would be making a capital loss
B. No, my dividend yield is not different because it will be calculated on the purchasing price and it will be remaining same so my dividend will be similar in nature even if I am having a loss on sale of shares.
C.yes,my overall capital will be different because after I have made a loss on the overall sale of the share then the capital is bound to go down and the overall capital will decrease because of capital depreciation and constant dividend.
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