Use the table for the question(s)below.
Consider the following realised annual returns:

-McCoy paid a one-time special dividend of $3.20 on 18 October 2016. Suppose you bought McCoy stock for $47.00 on 18 July 2016, and sold it immediately after the dividend was paid for $63.32. What was your capital gain yield from holding McCoy stock?
A)6.8%
B)41.5%
C)34.7%
D)4.15%

Question

Use the table for the question(s)below.
Consider the following realised annual returns:
 
-McCoy paid a one-time special dividend of $3.20 on 18 October 2016. Suppose you bought McCoy stock for $47.00 on 18 July 2016, and sold it immediately after the dividend was paid for $63.32. What was your capital gain yield from holding McCoy stock?
A)6.8% 
B)41.5% 
C)34.7% 
D)4.15%

Quizplus · Accepted Answer

To calculate the capital gain yield, we need to divide the increase in stock price by the original stock price and express the result as a percentage. 
Thus, capital gain yield = (selling price - buying price)/buying price x 100% 
Plugging in the numbers from the question: 
capital gain yield = (63.32 - 47.00)/47.00 x 100% 
capital gain yield = 16.32/47.00 x 100% 
capital gain yield = 0.347 or 34.7%
Therefore, the answer is C, 34.7%.

Use the Table for the Question(s)below