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You purchased a stock at a price of $48.74. The stock paid a dividend of $1.91...

You purchased a stock at a price of $48.74. The stock paid a dividend of $1.91 per share and the stock price at the end of the year is $54.79. What is the capital gains yield?

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Expert Solution

Information provided:

Purchase price of stock= $48.74

Stock price at the end of the year= $54.79

Dividend= $1.91

Capital gains yield is calculated using the below formula:

Capital Gains Yield= Current price-original price/Original price*100

                                    = $54.79 - $48.74/ $48.74

                                    = $6.05/ $48.74

                                    = 0.1241*100

                                    = 12.41%.

In case of any query, kindly comment on the solution.

jeff jeffy answered 9 months ago
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