Two years ago, you purchased 100 shares of Coca-Cola Company.Your purchase price was $39 a share, plus a total commission of $29 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.25 per
Two years ago, you purchased 100 shares of Coca-Cola Company.Your purchase price was $39 a share, plus a total commission of $29 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.25 per share for the first year and $1.39 per share the second year. Also, assume that at the end of two years, you sold your Coca-Cola stock for $46 a share minus a total commission of $34 to sell the stock.
a. Calculate the dividend yield for your Coca Cola stock at the time you purchased it.
b. Calculate the dividend yield for your Coca-Cola stock at the time you sold it.
c. Calculate the total return for your Coca-Cola investment when you sold the stock at the end of two years.
d. Calculate the annualized holding period yield for your Coca-Cola investment at the end of the two-year period.
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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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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