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25 August, 13:51

Suppose you bought 200 shares of stock at an initial price of $52 per share. The stock paid a dividend of $0.44 per share during the following year, and the share price at the end of the year was $36. What is the percentage capital gains yield

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  1. 25 August, 14:50
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    We can find the capital gains yield from the following formula:

    Capital Gains Yield = Increase or decrease in the share price divided by Original cost of the shares when purchased

    By putting values

    Capital Gains Yield = ($52 - $36) / $52 = - 30.7%

    Explanation:

    We can see that there is a decrease in the share price and this is also evident form the capital gains yield formula.
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