Question

You purchased 300 shares of Samuel, Inc. stock for $44.90 a share. You have received a total of $630 in dividends and $12.460 in proceeds from selling the shares. 1. What is your total (rate of) return on this stock? II. What is your capital gains yield on this stock? II. What is your dividend yield on this stock

Answer 1

1. Rate of return is computed as follows:

= (Selling value - Purchase value + Dividend) / Purchase value

= ($ 12,460 - 300 x $ 44.90 + $ 630) / (300 x $ 44.90)

= - $ 380 / $ 13,470

= - 2.82% Approximately

ii. Capital gain yield is computed as follows:

= (Selling value - Purchase value) / Purchase value

= ($ 12,460 - 300 x $ 44.90) / 300 x $ 44.90

= - 7.50% Approximately

iii. Dividend yield is computed as follows:

= Dividend / Purchase value

= $ 630 / $ 13,470

= 4.68% Approximately