Today,you sold 200 shares of SLG plc.Your total return on these shares is 12.5%.You purchased the shares one year ago at a price of £28.50 a share.You have received a total of £280 in dividends over the course of the year.What is your capital gains yield on this investment?
A)4.80%
B)5.00%
C)6.67%
D)7.59%
E)11.67%

Question

Quizplus · Accepted Answer

Total earnings from the investment = (Sale price - Purchase price) + Dividends

Sale price = 200 shares x current price = 200 shares x (1 + 12.5/100) x £28.50 = £6,420

Total earnings = (£6,420 - (200 x £28.50)) + £280 = £2,350

Capital gains yield = (Sale price - Purchase price)/Purchase price x 100%

= (£6,420 - (200 x £28.50))/ (200 x £28.50) x 100%

= £3,840/£5,040 x 100%

= 76.19%

Therefore, the capital gains yield on this investment is 7.59%. The closest answer choice is D.

Today,you Sold 200 Shares of SLG Plc