You purchased 300 shares of stock at a price of $37.23 per share.Over the last year,you have received total dividend income of $351.What is the capital gains yield if your total return is 11.47 percent?

Question

Quizplus · Accepted Answer

The total return is the sum of the dividend yield and the capital gains yield. First, calculate the dividend yield: Dividend income / Initial investment = $351 / ($37.23 * 300) = $351 / $11169 = 0.0314 or 3.14%. Since the total return is 11.47%, the capital gains yield is the total return minus the dividend yield: 11.47% - 3.14% = 8.33%.

You Purchased 300 Shares of Stock at a Price of $37.23