Janis Rafferty purchased 100 shares of Gold Depot common stock at the beginning of January for $25.00

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Janis Rafferty purchased 100 shares of Gold Depot common stock at the beginning of January for $25.00 per share. Janis received a $1.25 dividend payment from the company at the end of December. At that time, the stock was selling for $27.50 per share.
a. Compute the dollar return earned by Janis during the year.
b. Compute the rate of return earned by Janis.
c. What was the dividend yield and the capital gain generated by Gold Depot during the year?
d. Compute the rate of return that Janis would have earned if she had purchased 500 shares instead of 100 shares of Gold Depot stock at the beginning of the year.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Principles of Finance

ISBN: 978-1285429649

6th edition

Authors: Scott Besley, Eugene F. Brigham

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