The common stock of Grady Co. returned an 11.25% rate of return last year. The dividend amount was $.70 a share which equated to a dividend yield of 1.5%. What was the rate of price appreciation on the stock?

Question

Quizplus · Accepted Answer

The total rate of return on the stock is the sum of the dividend yield and the rate of price appreciation. Given a total return of 11.25% and a dividend yield of 1.5%, the rate of price appreciation is 11.25% - 1.5% = 9.75%.

The Common Stock of Grady Co