Return to problem l. Suppose the year-end stock price after the dividend is paid is $36. What

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Return to problem l. Suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and capital gains yield in this case? Why is the dividend yield unaffected?
In problem
A stock is selling today for $40 per share. At the end of the year, it pays a dividend of $2 per share and sells for $44. What is the total rate of return on the stock? What are the dividend yield and capital gains yield?
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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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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