Question 1. Suppose a stock had an initial price of $84 per share, paid a dividend of $2.25 per share during the year, and had an ending share price of $92. What was the dividend yield? What was the capital gains yield? What was the total return?
Question 2. You bought one of Acme Corporation's 8 percent coupon bonds one year ago for $960.00. These bonds make annual payments and mature 5 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 7.4%. If the inflation rate was 3.4% over the past year, what would be your total real return on investment?
Question 3. You bought a share of 8.5% preferred stock for $103.00 last year. The market price for your stock is now $98.50. What is your total return for last year?
Question 4. A stock has an expected return of 12 percent, its beta is 1.3, and the risk-free rate is 4 percent. What must the expected return on the market be?