Suppose a Stock Had an Initial Price of $88 Per

question 140

Multiple Choice

Suppose a stock had an initial price of $88 per share, paid a dividend of $8 during the year and had an ending price of $98. What was the capital gain yield?

• A) 20.45%
• B) 10.20%
• C) 11.36%
• D) 9.09%

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Definitions:

Initial Cost

The upfront expenditure associated with the purchase or investment in an asset or project.

Exchange Rates

Exchange rates are the value of one currency for the purpose of conversion to another, influencing international trade and investments.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, suggesting that exchange rates should adjust to equalize the price of identical goods in different countries.

Exchange Rate

The worth of a currency when converted into another, establishing the amount of one currency that can be swapped for a different one.