One year ago, you purchased a stock at a price of $40 a share. Today, you sold the stock and realized a total return of 30%. Your capital gain was $8 a share. What was your dividend yield on this stock?

Question

Quizplus · Accepted Answer

The total return of 30% on the stock includes both the capital gain and the dividend yield. The capital gain of $8 on a purchase price of $40 per share represents a 20% gain ($8/$40 = 0.20 or 20%). Since the total return was 30%, the remaining 10% must come from the dividend yield.

One Year Ago, You Purchased a Stock at a Price