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PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
Edition 2ISBN: 978-1111821999PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
Edition 2ISBN: 978-1111821999 Exercise 3
About a year ago, John Bates bought some shares in the Seismic Mutual Fund. He bought the stock at $24.50 a share, and it now trades at $26.00. Last year, the fund paid dividends of 40 cents a share and had capital gains distributions of $1.83 a share. Using the approximate yield formula, what rate of return did John earn on his investment? Repeat the calculation using a handheld financial calculator. Would he have made a 20% rate of return if the stock had risen to $30 a share?
Explanation
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Approximate yield is the rate of return ...
PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
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