Johnny purchased $5,000 of Zenith Manufacturing common stock when it was selling for $125 per share. Today, which is one year after he purchased Zenith, Johnny sold the stock for $135. During the past year, Zenith paid a quarterly dividend equal to $1.50 per share. (a) What rate of return did Johnny earn on his investment in Zenith? (b) What were the (1) dividend yield and (2) the capital gains yield associated with holding the stock

Answer rating: 100% (QA)

Lets break down Johnnys investment in Zenith Manufacturing to calculate the rate of return dividend ... View the full answer