calculate the total return on a stock, which of the fo O Total Return = Capital Gain - Dividend Total Return = Sell Price - Purchase Price Total Return = Dividend + Capital Gain Total Return = (Sell Price) x (Shares)
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- n the formula ke >= (D1/P0) + g, what does (D1/P0) represent? Select one: a. The expected capital gains yield from a common stock b. The interest payment from a bond c. The expected dividend yield from a common stock d. The dividend yield from a preferred stockThe cost of preferred stock: a. is equal to the dividend yield b. is independent of the stock's price c. is equal to the YTM d. depends on dividend's growth rateFor the following stock investment, find (a) the total purchase price, (b) the total dividend amount, (c) the capital gain or loss, (d) the total return, and (e) the percentage return. Ignore broker and SEC fees. (a) What is the total purchase price? $ (b) What is the total dividend amount? (c) What is the capital gain or loss? (d) What is the total return on investment? (e) What is the percentage return? (Round to the nearest percent.) Number of shares Purchase price per share Dividend per share Sale price per share 70 $40 $2 $82
- Define the terms covariance and correlationcoefficient. How are they related to one another,and how do they affect the required rate of returnon a stock? Would correlation affect its requiredrate of return if a stock were held (say, by the company’s founder) in a one-asset portfolio?i) Calculate the expected return for each stock assuming the Capital Asset Pricing Model (CAPM) is valid, and explain if they are correctly priced. Show your calculations.Which of the statements is NOT TRUE about the yield of a stock?a) It is comprised of dividend yield + capital gains yieldb) Dividend yield is equal to dividend per share divided by the purchase price of the stockc) Capital gains yield is the increase in the price of the stockd) Capital gains yield is the increase in price with respect to the purchase price divided by the purchase price
- When is it appropriate to use the dividend valuation model in estimating the price of a stock?To estimate the required rate of return on a stock we can use the Capital Asset Pricing Model (CAPM) or the Discount Dividends Model. How we can decide which model to use? Explain.What does the capital asset pricing model (CAPM) calculate? a. The expected rate of return on an individual stock with respect to the risk-free rate of return b. The expected rate of return of an individual stock based on its overall risk c. The expected rate of return of an individual stock with respect to its market risk only d. The expected rate of return of an individual stock reflecting its financial risk Clear my choice
- The dividend yield rate is equal to the dividends per share divided by the par value per share of common stock. Group of answer choices True FalseHow does one calculate the capital gains yield and the dividendyield of a stock?The Expected Rate of Profit Formula looks at: A. Expected Profit & Money Invested B. Common Stock & Preferred Stock C. Expected Profit & Bonds D. All of the above