FIN 3826 Chapter : Chapter 1 Powerpoint
Document Summary
@2002 by the mcgraw- hill companies inc. all rights reserved. The return on an investment measured in dollars that accounts for all cash flows and capital gains or losses. Total dollar return = dividend + capital gain (or loss) on stock income. The return on an investment measured as a. % of the originally invested sum that accounts for all cash flows and capital gains or losses. It is the return for each dollar invested. Percent return = dividend + capital gains on stock yield yield or total dollar return . Example: calculating returns w suppose you invested ,000 in a stock at per share. After one year, the price increases to . For each share, you also received in dividends. Dividend yield = / = 8% Capital gains yield = ( ) / = 40% Total percentage return = 8% + 40% = 48% Total dollar return = 48% of ,000 = .
