A stock is selling today for $50 per share. At the end of the year, it pays

Fantastic news! We've Found the answer you've been seeking!

Question:

A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $2 per share and sells for $60. What is the total rate of return on the stock? What are the dividend yield and capital gains yield?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

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

See More Books

Posted Date: Apr 09, 2024 11:40 AM

See More Questions

1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...
13. What is a lower bound for the price of 3-month call option on a non- dividend-paying stock when the stock price is $50, the strike price is $45, and the 3-month risk-free interest rate is 8%?...
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...
Susan and Stan Collins live in Iowa, are married and have two children ages 6 and 10. In 2018, Susans income is $38,290 and Stans is $12,000 and both are self-employed. They also have $500 in...
Method of continuous variation. Make a graph of absorbance versus mole fraction of thiocyanate from the data in the table. (a) What is the stoichiometry of the predominant Fe(SCN) n 3-n species? (b)...
New Horizons Co. is a high-tech firm whose owner does not have the required management expertise to run the firm. The owner wants to hire a manager with the required expertise. The continued success...
With roots that go back to before the Great Depression, Marriott International (www.marriott.com) has come a long way from its founding by husband and wife John and Alice Marriott. As of 2014,...
Preparing Bank Reconciliation, Entries, and Reporting Cash The September 30, 2011, bank statement for Bennett Company and the September ledger accounts for cash are summarized here: No outstanding...
10) The company paid its suppliers $367,824 for inventory it had previously purchased on account. Describe the effects of this transaction on the accounting equation in terms of debits and credits...
Let UCR be open and let g: U Rn be smooth. Prove that if WEN (Rn) then g* (dw) = dg* (w).
In framing the audit programmes of specialised enterprises, what additional factors are required to be considered by the auditor?
Who can conduct cost audit under the Companies Act, 1956?
Discuss the objectives of Auditing.
Write a brief outline of the development of audit profession in India.
Indicate the main features of public sector undertaking. How it is different from private sector undertakings?
State the principal-agent problem when there is uncertainty over both a projects return and an agents effort. In which ways can foreign trade affect competition, product-market shares and a projects...
The percentage of completion and completed contract methods are described in the FASB ASC. Search the codification to find the paragraphs covering these topics, cite them, and copy the results.
You have been asked to consult for an entrepreneur who is assembling investors for a new professional sport league. A critical decision for the league will be whether to organize under a...
Does a company share its risk by issuing equity or debt?
How are the features of a convertible bond similar to both debt and equity?

A stock is selling today for $50 per share. At the end of the year, it pays

Question:

Expert Answer:

To calculate the total rate of return on the stock we need to consider both the dividend yield and t... View the full answer

Fundamentals of Corporate Finance

Students also viewed these finance questions