A stock had an initial price of GH¢5,000 per share, paid a dividend of GH¢1,000 per share at the end of the year and had an ending share price of GH¢3,500. What is (a) the dividend yield (b) the capital gain (%) (c) total return on the stock

A stock had an initial price of GH¢5,000 per share, paid a dividend of GH¢1,000 per share at the end of the year and had an ending share price of GH¢3,500. What is (a) the dividend yield (b) the capital gain (%) (c) total return on the stock

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 5P

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

Question

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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