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The Toy Chest will pay an annual dividend of $2.64 per share next year and currently sells for $48.30 a share based on a market rate of return of 11.67 percent. What is the capital gains yield

Respuesta :

Answer:

Dividend yield per share = 6.20%

Explanation:

Given:

Annual dividend = $2.64

Current price = $48.30

Market rate of return = 11.67 %

Find:

Capital gains yield

Computation:

Dividend yield per share = Annual dividend / Current price

Dividend yield per share = $2.64/$48.30

Dividend yield per share = 0.0547 = 5.47%

Capital gains yield = Market rate of return - Dividend yield per share

Dividend yield per share = 11.67% - 5.47%

Dividend yield per share = 6.20%