Question

One year ago, Debra purchased 5,400 shares of KNF stock for $218,056. Today, she sold those shares for $19.49 a share. What is the capital gains yield on this investment if the dividend yield is 1.7 percent?
A.-28.01 percent
B.-48.28 percent
C.3.07 percent
D.-51.73 percent
E.4.53 percent

Answer 1

Answer:

Capital gain yield will be -51.73%

So option (d) will be the correct answer

Explanation:

We have given that Debra purchased 4500 shares of KNF stock for $218056

So price of one share $=\frac{218056}{5400}= 48.380$

So the beginning price = $40.380

She sold the share at price of 19.49 per share

So ending price = $19.49

We have to find the capital gain yield

We know that capital gain yield is given by

Capital gain yield $=\frac{end\ price-beginning\ price}{begninning \ price}=\frac{19.49-40.380}{40.390}=-51.73$ %

So option (d) will be correct option