Total return: It is the sum total of capital, dividend, interest and gains that an investor receives over particular investment at a given period of time. Dividend yield: Dividend received during the year divided by the purchase price of the stock gives the dividend yield. Shareholders who invest in shares expect a return in the form of dividends. The dividend yield is the percentage return that the shareholder foresees to earn from the dividend paid by a share in a year. Capital gain rate: Capital gain is the benefit that an investor receives on capital invested. The extra amount received from selling the stock after one year. To calculate the capital gain rate, divide the difference between the expected selling price and the purchase price by the purchase price of the stock. To determine: The total return earned over the year.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 5P

Summary Introduction

Total return: It is the sum total of capital, dividend, interest and gains that an investor receives over particular investment at a given period of time.

Dividend yield: Dividend received during the year divided by the purchase price of the stock gives the dividend yield. Shareholders who invest in shares expect a return in the form of dividends. The dividend yield is the percentage return that the shareholder foresees to earn from the dividend paid by a share in a year.

Capital gain rate: Capital gain is the benefit that an investor receives on capital invested. The extra amount received from selling the stock after one year. To calculate the capital gain rate, divide the difference between the expected selling price and the purchase price by the purchase price of the stock.

To determine:

The total return earned over the year.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

le Shema actencial de theophile caution

You plan to purchase a $200,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 7.25 percent, or a 15-year mortgage with a rate of 6.50 percent. You will make a down payment of 20 percent of the purchase price. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid? Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages?

Problem 2-21 Financial Statements Use the following information for Ingersoll, Incorporated. Assume the tax rate is 23 percent. 2020 2021 Sales Depreciation $ 19,073 $17,436 1,811 1,886 Cost of goods sold 4,729 4,857 Other expenses 1,021 899 Interest 870 1,001 Cash 6,292 6,916 Accounts receivable 8,190 9,877 Short-term notes payable 1,320 1,297 Long-term debt 20,770 25,011 Net fixed assets 51,218 54,723 Accounts payable 4,624 5,094 Inventory 14,538 15,438 1,700 1,768 Dividends Prepare a balance sheet for this company for 2020 and 2021. (Do not round intermediate calculations.) Cash Assets Accounts receivable Inventory INGERSOLL, INCORPORATED Balance Sheet as of December 31 2020 2021 $ 6,292 $ 6,916 8,190 9,877 14,538 15,438 Drov 14 of 20 Ne