1. Suppose a stock had an initial price of $83 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $76. Compute the dividend yield, the capital gains yield and the percentage total return.
2. Phoenix Company common stock is currently selling for $20 per share. Security analysts at Smith Blarney have assigned the following probability distribution to the price of (and rate of return on) Phoenix stock one year from now: Price Rate of Return Probability $16 –20% 0.25 20 0% 0.30 24 +20% 0.25 28 +40% 0.20.