EBK CORPORATE FINANCE
EBK CORPORATE FINANCE
4th Edition
ISBN: 8220103164535
Author: DeMarzo
Publisher: PEARSON
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Chapter 10, Problem 4P

a)

Summary Introduction

To determine: The realized return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

b)

Summary Introduction

To determine: The return from dividend yield and return from capital gain.

Introduction:

Dividend yield refers to the percentage of the initial price of the share received as a dividend. Capital yield refers to the change in the value of investment stated in terms of percentage.

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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 gain separately.
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EBK CORPORATE FINANCE

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Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY