Suppose a stock had an initial price of $87 per share, paid a dividend of $1.80 per share during the year, and had an ending share price of $73.00. Compute the percentage total return. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage total return% What was the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Dividend yield% What was the capital gains yield? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield% Expert Answer

Respuesta :

Answer:

In order to find the return we need to subtract the beginning price from the ending price, add the dividend to it and divide it by the beginning price.

Beginning price = 87

Ending price= 73

Dividend = 1.80

Return= (73-87+1.80)/87

=-12.2/87= -0.1402

Percentage total return= -14.02%

The dividend yield is the most recent dividends of the stock divided by the current price of the stock.

Dividend yield= 1.80/73.00=0.024=2.4%

Capital gains yield is the percentage price increase of the stock compared to when we bought it. In order to find it we subtract the beginning price from the current price and divide it by the beginning price

73-87/87=-14/87

=-0.1609

=-16.09%

Explanation: