You bought a stock of XYZ one year ago for $50 per share and sold it today for $55 per share. It paid a $1 per share dividend today. What was your realized return? How much of the return came from dividend yield and how much came from capital gain? Assuming that the stock fell $5 to $45 instead. Is your capital gain different? Why or why not? Is your dividend yield different? Why or why not?

You bought a stock of XYZ one year ago for $50 per share and sold it today for $55 per share. It paid a $1 per share dividend today. What was your realized return? How much of the return came from dividend yield and how much came from capital gain? Assuming that the stock fell $5 to $45 instead. Is your capital gain different? Why or why not? Is your dividend yield different? Why or why not?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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