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Rate of return - a stock selling today for 40 per share at

Rate of Return - A stock selling today for $40 per share. At the end of the year, it pays a dividend of $2 per share and sells for $44 (LO11-2)

a. What is the total rate of return on the stock?

b. What are the dividend yield and percentage capital gain?

c. Now suppose the year end stock price and the dividend paid is $36. What are the dividend yield and percentage capital gain in this case?

d. Why is the dividend yield the same in parts b and d?

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Business Economics: Rate of return - a stock selling today for 40 per share at

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