Example:Calculating Returns You bought a stock for $35 and you received dividends of $1.25.The stock is now selling for $40. What is your dollar return? Dollar return 1.25+(40-35)=$6.25 What is your percentage return? Dividend yield 1.25/35 3.57% Capital gains yield =(40-35)/35 14.29% Total percentage return 3.57+14.29 17.86% 66 Example: Calculating Returns n You bought a stock for $35 and you received dividends of $1.25. The stock is now selling for $40. q What is your dollar return? n Dollar return = 1.25 + (40 – 35) = $6.25 q What is your percentage return? n Dividend yield = 1.25 / 35 = 3.57% n Capital gains yield = (40 – 35) / 35 = 14.29% n Total percentage return = 3.57 + 14.29 = 17.86%