An investor bought the share of ABC Corp for $100. One year from now, ABC pays...

An investor bought the share of ABC Corp for $100. One year from now, ABC pays a dividend of $5 per share and the share price rises to $125. On the basis of this information, the dividend yield, capital gain, and total expected return for holding ABC stock for one year amounts to:

a.
5%, 20%, and 25%

b.
5%, 25% and 30%

c.
4%, 20% and 30%

d.
20%, 4%, 30%

Expert Solution

rate positively ..


Dividend yield=		5.00%
5/100

Capital gain yield=		25.00%
25/100

Total expected return =	30.00%
5%+25%

Therefore answer = b. 5%, 25% and 30%

jeff jeffy answered 2 years ago

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