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If you were to receive a $5 dividend on a stock you purchased for $20, what...

If you were to receive a $5 dividend on a stock you purchased for $20, what would your dividend yield be? What would be capital gain? total gain?

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Expert Solution

Dividend yield= (dividend payment / price of the share)

= (5/20)*100= 25%

My dividend yield would be 25%.

The capital gain and would be none because the shares have not been provided with the closing price and it has not been sold.

Total gain will only be calculated when the shares are sold and the closing prices is given but in this case the purchasing price is only given, and we can only calculate with the dividend yield because it has been paid to us.

jeff jeffy answered 2 years ago
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