Assume that you buy some shares for $2.50 per share. At the endof the year,...

Assume that you buy some shares for $2.50 per share. At the end of the year, the price is $3.50 per share. During the year you got a dividend of $0.20 per share. What is the capital gains yield?

A. 250.0%

B. 100.0%

C. 40.0%

Expert Solution

Capital gains yield = (Selling price - purchase price)/Purchase price

We do not consider dividend in calculating capital gains yield.

Capital gains yield = (3.50 - 2.50)/2.50

Capital gains yield = 0.4

Capital gains yield = 40.0%

Option C is correct

jeff jeffy answered 2 years ago

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