Emaline returns if the share price of emaline a new

Question

Question: Use the following formula to answer problems on shareholder returns, where Pt is the share price at time t, and Dt is the dividend paid at time t.

Shareholder Return = D₂ + P₂ - P₁
                             P₁       P₁

Emaline Returns. If the share price of Emaline, a New Orleans-based shipping firm, rises from $12 to $15 over a one-year period, what is the rate of return to the shareholder given each of the following:

a. The company paid no dividends

b. The company paid a dividend of $1 per share

c. The company paid the dividend and the total return to the shareholder is separated into the dividend yield and the capital gain