You just purchase a share of AMZ for$90. You expect to receive a dividend of $7 in one year. If you expect the price after the dividend is paid to be $120, what total return will you have earned over the year? What was your dividend yield? What is your capital gain rate?

You just purchase a share of AMZ for$90. You expect to receive a dividend of $7 in one year. If you expect the price after the dividend is paid to be $120, what total return will you have earned over the year? What was your dividend yield? What is your capital gain rate?

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

What is your capital gain rate on these financial accounting question?

You just purchase a share of AMZ for$90. You expect
to receive a dividend of $7 in one year. If you expect
the price after the dividend is paid to be $120, what
total return will you have earned over the year? What
was your dividend yield? What is your capital gain
rate?

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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