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    capital gain

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    One year ago, Seth invested $10,400 in 200 shares of ABC company Imc. Stock and just received a dividend of $600. Today, the shares are sold for $54.25 per share

    a) what is Seth's capitol gain?
    b) What is Seth's total dollar return?
    c) What was Seth's percentage return?
    d) What is the stock's dividend yield?

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    Solution Preview

    a. The capital gain is the appreciation of the stock price. Find the amount that Seth
    paid for the stock one year ago by dividing his total investment by the number of shares he purchased ($52.00 = $10,400 / 200). Because the price of the stock increased from $52.00 per share to $54.25 per share, he earned a ...

    Solution Summary

    A capital gain example is clarified.