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A stock was purchased for Ghc40 per share and sold for Ghc50 per share one year...

  1. A stock was purchased for Ghc40 per share and sold for Ghc50 per share one year later. In the course of the year the company paid a dividend of Ghc2 per share.
  1. Calculate the return on the investment
  2. Calculate the dividend yield on the investment
  3. Calculate the capital gains yield on the investment

Solutions

Expert Solution

Return on investment=(End value-Beginning value+Dividend)/Beginning value  

=(50-40+2)/40

=30%

Dividend yield=Dividend/Beginning value  

=2/40

=5%

Capital gains yield=(End value-Beginning value)/Beginning value  

=(50-40)/40

=25%

jeff jeffy answered 1 year ago
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