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 annual dividend payment divided by the stock price, while capital appreciation refers to any increase in a stock's price over time. Together, these two components make up the total expected return on a stock.

The Expected Return on a Common Stock Is Composed Of