Let’s consider the dividend and the dividend yield of the Calzone Corporation. Last year, the Corporation paid a $.50 quarterly dividend which was the same dividend as the previous year.  The stock sold for $88 last year and lately the stock is selling for $100. What was the annual dividend this year? What was the dividend yield last year? What is the current dividend yield? If a New York City resident investor bought 1,000 shares of the stock at the beginning of the year for $88 and held the stock until the end of this year when the stock was selling for $100, what would be the realized return on this investment and the unrealized return on this investment? What would be the rate of return on this investment (a rate is expressed as %) Would the investor be required to pay any tax on this investment? If so, how much tax would be required if the investor’s combined federal, state and city income tax bracket was 35%.  (25% federal and 10% combined state and city.)

7.

Today, you sold 1 share of Mega stock.  The percentage return over the past quarter (from 3 months ago to today) for these shares was 8.00 percent.  You purchased the shares 3 months ago at a price of $165.20 per share.  You just received $4.65 in dividends.  What was the price of the stock when you sold it? Electric Blue stock is expected to pay a dividend of $5.27 in 1 year and a dividend of $8.05 in 2 years.  The stock is expected to be priced at $62.06 in 1 year and at $66.00 in 2 years.  What is the current price of Electric Blue stock?  The stock’s dividend is paid annually and the next dividend is expected in 1 year.

One year ago, Barkley's stock sold for $28 a share. During last year, Barkley's paid $1.23 per share in dividends and saw its stock price increase by 7 percent for the year. Today, the firm announced that it will pay $1.30 per share in dividends this year. What do you know with certainty about the performance of Barkley's stock for this year? Multiple Choice The capital gains yield will be positive. The dividend yield for this year will be lower than it was last year. The total rate of return will be lower this year than it was last year. The total rate of return will be higher this year than it was last year. The dividend yield for this year will be higher than it was last year.

You purchased GARP stock one year ago at a price of $68.54 per share. Today, you sold your stock and earned a total return of 18.91 percent. The stock paid dividends of $3.04 per share over the year. What was the capital gains yield on your investment?

Corporations often distribute profits to their shareholders in the form of dividends, which are simply checks mailed out to shareholders. Suppose that you have the chance to buy a share in a fashion company called Rogue Designs for $35 and that the company will pay dividends of $2 per year on that share every year. What is the annual percentage rate of return? Next, suppose that you and other investors could get a 12 percent per year rate of return by owning the stocks of other very similar fashion companies. If investors care only about rates of return, what should happen to the share price of Rogue Designs? (Hint: This is an arbitrage situation.)