The common stock of Grady Co. had 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?
A) 1.50%
B) 8.00%
C) 9.75%
D) 11.25%
E) 12.75%

Question

Quizplus · Accepted Answer

The rate of price appreciation is the difference between the rate of return and the dividend yield. In this case, the rate of return is 11.25% and the dividend yield is 1.5%, so the rate of price appreciation is 11.25% - 1.5% = 9.75%.

The Common Stock of Grady Co