Question

You bought a stock one year ago for $51.41 per share and sold it today for $59.82 per share. It paid a $1.03 per share dividend today. How much of the return came from dividend yield and how much came from capital gain? The return that came from dividend yield is ________ (Round to one decima %. l place.) The return that came from capital gain is _______.

Answer 1

Answer:

Return from dividend yield= 2.0%

Capital gain = 16.4%

Explanation:

The return on a stock is the sum of the capital gains(loss) plus the dividends earned.

Capital gain is the difference between the value of the stocks when sold and the cost of the shares when purchased.

Total shareholders Return =  

(Capital gain/ loss + dividend )/purchase price × 100

The total return can be broken down into

Dividend yield = Dividend/price × 100

= 1.03/51.41 × 100

=2.0%

Capital gain = capital gain/ price  × 100

= (59.82 - 51.41)/51.41 × 100 = 16.4%