Answer to Question #272192 in Economics for Hasab

Question #272192

If current price of stock is $25 and you hold it for one year and received dividend of $2.5. You sold it at $27. How much return you received? Show dividend yield and capital gain separately

1
Expert's answer
2021-11-28T17:56:04-0500

Dividend yield is $2.5 or 2.5/25=0.12.5/25 = 0.1 or 10% and capital gain is 27 - 25 = $2 or 2/25=0.082/25 = 0.08 or 8%.

So, the total return is 2.5 + 2 = $4.5 or 10 + 8 = 18%.


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