The expected return on a common stock is composed of:
A)Dividend yield
B)Capital appreciation
C)Both dividend yield and capital appreciation
D)Capital appreciation minus the dividend yield

Question

Quizplus · Accepted Answer

The expected return on a common stock is composed of both dividend yield and capital appreciation. Dividend yield is the portion of the return that comes from the periodic payments made by the company to its shareholders, while capital appreciation is the increase in the stock's price over time. Both factors contribute to the total expected return on a common stock.

The Expected Return on a Common Stock Is Composed Of