
Concept explainers
Realized Returns,
Realized returns refer to the actual returns that are earned during the holding period of an investment. Realized returns include dividends, interest payments, and cash distributions. It is acquired though the movement of prices of stocks from one period to another or from time to time. The movement in price reflects the changes that occur until the holding period of time of an investment. It carries the dividend amount with it. It can be measured in two ways, which are capital gain yield and dividend yield.
The change in the prices from one period to another until the holding period or the appreciation that occurred in the market refers to capital gain yield. The increase in the price of a particular stock primarily due to the announcement of a dividend refers to dividend yield.
To determine:
Whether the (a) capital gain and (b) dividend yield is different when the price of stock fell $5 to $45.

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Chapter 11 Solutions
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
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