If current price of stock is $25 and you hold it for one year and received dividend of $2.5.You sold it at $27. How much return you received? Show dividend yield and capital gainseparately. If investor required return is 20% and capital gain is 8% how much dividend company should pay?

If current price of stock is $25 and you hold it for one year and received dividend of $2.5.You sold it at $27. How much return you received? Show dividend yield and capital gainseparately. If investor required return is 20% and capital gain is 8% how much dividend company should pay?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

8th Edition

ISBN:9781285065137

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 6DQ

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Question

If current price of stock is $25 and you hold it for one year and received dividend of $2.5.You sold it at $27. How much return you received? Show dividend yield and capital gainseparately.

If investor required return is 20% and capital gain is 8% how much dividend company should pay?

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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