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Suppose a stock had an initial price of $65 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $58. a, Compute the percentage total return. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the dividend yield and the capital gains yield

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Solution and Explanation:

The total return is as follows:

Total return = (Closing price – opening price + dividend) / opening price

[tex]=(\$ 58-\$ 65+\$ 1.45) / \$ 65[/tex]

= -8.54%

Therefore, the total return is -8.54%

b. Dividend yield is as follows;

Dividend yield = Dividend / opening price

= $1.45 divided by $65

= 2.23%

Therefore, the dividend yield is 2.23%

c. the capital gain yield is as follows;

Capital gain yield = (Closing price – opening price) / opening price  

[tex]=(\$ 58-\$ 65) / \$ 65[/tex]

= -10.77%

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