Question

You bought a stock one year ago for $51.77 per share and sold it today for $59.025 per share. It paid a $1.43 per share dividend today. a. What was your realized return? b. How much of the return came from dividend yield and how much came from capital gain? a. What was your realized return? The realized return was nothingm%. (Round to two decimal places.) b. How much of the return came from dividend yield and how much came from capital gain? The return that came from dividend yield is nothingm%. (Round to two decimal places.) The return that came from capital gain is nothingm%. (Round to two decimal places.)

Answer 1

Purchase Price = $51.77
Selling Price = $59.025
Dividend = $1.43

Answer a.

Realized Return = (Selling Price + Dividend - Purchase Price) / Purchase Price
Realized Return = ($59.025 + $1.43 - $51.77) / $51.77
Realized Return = 0.1678 or 16.78%

Answer b.

Dividend Yield = Dividend / Purchase Price
Dividend Yield = $1.43 / $51.77
Dividend Yield = 0.0276 or 2.76%

Answer c.

Capital Gain Yield = (Selling Price - Purchase Price) / Purchase Price
Capital Gain Yield = ($59.025 - $51.77) / $51.77
Capital Gain Yield = 0.1402 or 14.02%