In: Finance
Suppose a stock had an initial price of $65 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $58.
a, 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.)
b. What was the dividend yield and the capital gains yield? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
a) the percentage total return = [P1 -P0+ D]/P0
= [58 -65 +1.45 ]/65
= -5.55/65
= - .0854 or 8.54%
b)Dividend yield =D/P0
= 1.45 /65
= .0223 or 2.23%
Capital gain yield = [P1-P0]/P0
= [58- 65]/65
= - 7/65
= - .1077 or - 10.77%