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Suppose That the Price of a Stock Is $50 at the Beginning

Question 103

Essay

Suppose that the price of a stock is $50 at the beginning of a year and $53 at the end of the year, and it pays a dividend of $2 during the year.
a.What is the stock's current yield?
b.What is the stock's capital-gains yield?
c.What is the stock's return?

Correct Answer:

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a.Current yield = $2/$50 = .04...

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