The total return on a stock is equal to
A)Annual dividend / Current stock price.
B)Capital gains yield - Dividend yield.
C)Capital gains yield + Dividend yield.
D)(1 + Dividend yield)× (1 + Inflation rate)- 1.
E)(1 + Capital gains yield)/ (1 + Dividend yield)- 1.

Question

Quizplus · Accepted Answer

The total return on a stock is the sum of capital gains yield and dividend yield. Therefore, the correct option is C which represents the sum of both yields. Option A only calculates the dividend yield, B calculates the difference between the two yields, D calculates the return adjusted for inflation, and E calculates the total return using a formula that is not commonly used.

The Total Return on a Stock Is Equal to