You purchase 800 shares of stock at a price of $20 per share. One year later, the shares are sellingfor $23 per share. In addition, a dividend of $2 per share is paid at the end of each year. What is thecapital gains yield for the investment?O 8.5%O 10.0%O 25.0%O 20.0%O 15.0%

The capital gain yield is the gain in value of shares without considering the dividend income.

Answered: You purchase 800 shares of stock at a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You purchase 800 shares of stock at a price of $20 per share. One year later, the shares are selling for $23 per share. In addition, a dividend of $2 per share is paid at the end of each year. What is the capital gains yield for the investment? O 8.5% 10.0% O 25.0% O 20.0% 15.0%