Use the table for the question(s)below.
Consider the following price and dividend data for Ford Motor Company:

-Assume that you purchased Ford Motor Company stock at the closing price on December 31,2004 and sold it after the dividend had been paid at the closing price on January 26,2005.Your capital gains rate (yield)for this period is closest to:
A)0.70%
B)0.75%
C)-8.80%
D)-8.15%
E)1.25%

Question

Use the table for the question(s)below.
Consider the following price and dividend data for Ford Motor Company:
 
-Assume that you purchased Ford Motor Company stock at the closing price on December 31,2004 and sold it after the dividend had been paid at the closing price on January 26,2005.Your capital gains rate (yield)for this period is closest to:
A)0.70% 
B)0.75% 
C)-8.80% 
D)-8.15% 
E)1.25%

Quizplus · Accepted Answer

To calculate the capital gain rate, we need to first calculate the total return of the stock. 
Total Return = (Price on January 26 - Price on December 31 + Dividend) / Price on December 31
Total Return = (14.03-14.10+0.10)/14.10 = -0.49%
Since the total return is negative, the capital gain rate is also negative. Therefore, the closest answer is -8.80%.

Use the Table for the Question(s)below