Sam purchased a stock for $46.91 one year ago. Today he sold the stock for $48.03. The stock paid a total of $1.40 in dividends over the year. What capital gains yield did Sam realize on this
Investment?

Question

Quizplus · Accepted Answer

To calculate the capital gains yield, we need to use the following formula:

Capital gains yield = (ending price - beginning price + dividends) / beginning price

Plugging in the values given, we get:

Capital gains yield = ($48.03 - $46.91 + $1.40) / $46.91 = 2.39%

Therefore, the best choice is B, with a capital gains yield of 2.39%.

Sam Purchased a Stock for $46