One year ago, you purchased a stock at a price of $38.22 a share. Today, you sold the stock and realized a total loss of 11.09 percent on your investment. Your capital gain was -$4.68 a share. What was your dividend yield?

Question

Quizplus · Accepted Answer

The dividend yield can be calculated by understanding that the total loss includes both the capital loss and the dividend received. The capital loss per share is $4.68, which is 11.09% of the initial investment. This means the initial investment was $38.22 per share. The total loss (11.09%) of $38.22 is $4.23. Since the capital loss is $4.68, and the total loss is $4.23, it implies a positive dividend was received to make up the difference. The dividend received per share is $4.68 - $4.23 = $0.45. The dividend yield is then calculated as the dividend received divided by the initial investment price: ($0.45 / $38.22) * 100 = 1.18%. However, due to rounding in the calculation, the closest answer provided is 1.15 percent.

One Year Ago, You Purchased a Stock at a Price