PFIN 7:STUDENT EDITION-TEXT
7th Edition
ISBN: 9780357033616
Author: Billingsley
Publisher: CENGAGE L
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Chapter 13, Problem 7FPE
Summary Introduction
To calculate: The
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About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.50 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.72 a share and had capital gains distributions of $2.50 a share. Assume that the mutual fund distributed the dividends and capital gains at the end of the year.
Using the approximate yield formula, what rate of return did Eric earn on his investment? Round the answer to two decimal places.
%
Repeat the calculation using a handheld financial calculator. Round the answer to two decimal places.
%
What rate of return would he have earned if the stock had risen to $30 a share? Round the answer to two decimal places.
%
One year ago, Christos bought 1,100 units of the Dominion Aggressive Growth Fund at $20.40 per unit. Today a unit's value is $19.20.
During the year, the fund made a distribution of $0.50 per unit.
On this investment, what is Christos's income yield? (Round your answer to two decimal places.)
Assume that one year ago, you bought 210 shares of a mutual fund for $24 per share and that you received an income dividend of 50.31 cents per share and a capital gain distribution of $1.04 per share during the past 12 months. Also assume the market value of the fund is now $26.50 a share. Calculate the total return for this investment if you were to sell it now.
Chapter 13 Solutions
PFIN 7:STUDENT EDITION-TEXT
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