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A stock worth $950 was purchased one year earlier which is now trading at $988. During the last year a dividend of $47.50 was received.
Stock’s
Dividend yield is calculated as the expected dividend for a year divided by the price of the stock at the beginning of the period.
Capital gains yield is the change in stock value represented as a percentage change.
Rate of return on the stock is the sum of the dividend yield and capital gains yield.
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Chapter 7 Solutions
CFIN -STUDENT EDITION-W/ACCESS >CUSTOM<
- An investor purchased a stock one year ago for $83.00. It paid an annual cash dividend of $3.76 and is now worth $96.83. What total return did the investor earn? Would the investor have experienced a capital gain? Explainarrow_forwardAn investor in Sony purchased the stock last year for $22.16. Today, the investor was able to sell the stock for $34.25. What capital gain did the investor earn in the past year?arrow_forwardAlbert Einstein purchased a stock last year and sold it today for $4 a share more than his purchase price. He received a total of $1.15 per share in dividends. Which one of the following statements is correct in relation to this investment? The capital gains yield is positive. The total dollar return per share is $2.85. The capital gain would have been less had Stacy not received the dividends. The dividend yield is expressed as a percentage of the par value. The dividend yield is greater than the capital gains yield.arrow_forward
- An investor purchased a stock one year ago for $43.00. It paid an annual cash dividend of $3.37 and is now worth $50.61. What total return did the investor earn? Would the investor have experienced a capital gain? The investor would experience a capital gain in the amount of $?. Round to nearest cent The total return earned by the investor is $?arrow_forwardAmelia Earhart purchased a stock at a price of $54.82. The stock paid a dividend of $1.95 per share and the stock price at the end of the year was $61.24. What was the total return for the year?arrow_forwardAbigail bought 28 shares of stock at $30.00 per share. She received dividends of $49.50 during the year. At the end of the year, her stock was valued at $43.50 per share. What was her ROI (Return on Investment)?arrow_forward
- You purchased a share of stock in The Hephaestus Company last year at $40, which paid you a $2 dividend during the year. What is your holding period return if: a. You sell the stock for $44. b. You sell the stock for $50. c. You sell the stock for $35arrow_forwardFind the realized return that you would earn if you purchased a stock originally for $43, sold it for $42, and during the year received a dividend of $3.arrow_forwardNancy Cotton bought 400 shares of NeTalk for $15 per share. One year later, Nancy sold the stock for $21 per share, just after she received a $0.90 cash dividend from the company. a. What is the total dollar return earned by Nancy for the year? b. What is the rate of return earned by Nancy?arrow_forward
- This morning Sophia sold 500 shares of Multiface Consulting for $75.60 per share. She purchased the stock for $70 one year ago. During the time she held the stock, Sophia received two dividend payments; one dividend payment was $1.00 per share and the other dividend payment was $1.10 per share. What yield (rate of return) did Sophia earn on her investment for the year she held the Multiface stock?arrow_forwardTiffany bought a stock for $80 and company paid no dividend. At the end of the year she sold the stock for $60. For the holding time, how much return this stock generated for her? She wanted a 35% return on this stock when purchased. At what selling price, she would have generated that return? Do all calculation answer must be correct. Answer step by step.arrow_forwardCurtis purchased a stock with an initial share price of $140 and sold it when the share price was $119. While he owned the stock, he earned $10 in dividends. What was his total percentage return on the investment?arrow_forward
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
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