About a year ago, Nigel Palmer bought some shares in the Equity Partners Mutual Fund. He bought the stock at $25.80 a share, and it now trades at $26.30. Last year the fund paid dividends of 51 cents a share and had capital gains distributions of $1.03 a share.
1. Using the approximate yield formula, what rate of return did Nigel earn on his investment? Round the answer to two decimal places.
%
2. Repeat the calculation using a handheld financial calculator. Round the answer to two decimal places.
%
3. Would he have made a 20% rate of return if the stock had risen to $30 a share?
-Select-
Yes
No