How do you determine the ROI based on a new dividend yield? What are the steps in the calculation? I have tried subtracting the new stock value from the prior stock value for capital gains but keep getting the wrong answer. The following is the information available.

Year Cash Div/Share Stock Price ROI

2012 $2.91 50.4347826

2013 $3.31 70.9090909 ?

2014 $3.63 81.7391304 ?

Question states: the rate of return on equity (i.e., the cost of stock) based on the new divided yield you calculated.

The new dividend yield is as follows: (dividends were increased by $1.75)

Year Cash Div/Share Dividend Yield

2012 $2.91 5.77%

2013 $3.31 4.67%

2014 $3.63 4.44%

Original dividend yield is as follows:

Year Div/Share Dividend Yield

2012 $1.16 2.30%

2013 $1.56 2.20%

2014 $1.88 2.30%

The formula provided is (D1+(P1-P0))/P0. The instructions state to use capital gains from 2011, which is as follows:

2011 $1.04 (div/share) 2.70% (dividend yield) $38.5185185 (stock price)

*Stock price fro 2012 - 2014 remained the same, as posted above.

What are the steps to determine the ROI? The correct answer is 3.72% & 3.78% for years 2013 & 2014... how are these number derived at? Does P1=50.4347826? and P0=38.5185185? Or are you supposed to use the dividend yield as the capital gain? The prior homework problem had us subtract stock prices to get the capital gains but when I do that here I get an ROI of like 92% and 121%. Please help, I'm lost and confused.

Thank you.