Asked by Fahad Hashmi on May 09, 2024
Verified
One year ago, Art Vandelay bought Norwood Industries shares for $37 per share. Today they are worth $40 per share. During the year, Art received dividends of $0.60 per share. What was his income yield, capital gain yield, and rate of total return for the year?
Capital Gain Yield
The price appreciation component of the total return on an investment, excluding any dividends or interest earned.
Income Yield
The income generated by an investment, usually expressed as a percentage of the investment's cost.
Total Return
The overall return on an investment, including the change in value plus any dividends or interest, over a specific period.
- Understand how to calculate income yield from an investment.
- Understand how to calculate capital gain yield from an investment.
- Understand how to calculate the total rate of return from an investment.
Verified Answer
SP
Learning Objectives
- Understand how to calculate income yield from an investment.
- Understand how to calculate capital gain yield from an investment.
- Understand how to calculate the total rate of return from an investment.