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29 December, 07:21

Suppose a stock had an initial price of $58 per share, paid a dividend of $1.90 per share during the year, and had an ending share price of $68. What was the dividend yield and the capital gains yield

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  1. 29 December, 07:22
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    Answer: Dividend yield is 3.3%

    Capital gains yield is 17.24%

    Explanation:

    Dividend yield is given as the ratio of annual dividend per share and stock's price per share.

    Dividend per share = $1.9

    Share price = $58

    Dividend yield = 1.9/58 = 0.033 or 3.3%

    Capital gain yield is the appreciation in the price of a stock expressed as a percentage.

    Capital gain yield = (current price - original price) / original price x 100

    Current price = $68

    Original price = $58

    CGY = (68-58) / 58 * 100 = (10/58) * 100 = 17.24%
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