A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $56.
a. What is the total rate of return on the stock? (Enter your answer as a whole percent.)
Rate of return _________%
b. What are the dividend yield and percentage capital gain? (Enter your answers as a whole percent.)
Dividend yield_________ %
Capital gains yield _________ %
c. Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)
Dividend yield ________ %
Capital gains yield _________%
d. Is there any change in the dividend yield calculated in parts (b) and (c)?
The dividend yield is _____; it is based on the_______ .