1. % Yield = ($26 - $24.5 + 0.40 + 1.83)/$24.5 = 15.22%
2. % Yield = (30 - $24.5 + 0.40 + 1.83)/$24.5 = 31.55% - Yes, 20% return exceeded at $30.
About a year ago, Nigel Palmer bought some shares in the equity fund. He bought the stock at $24.50 a share and it now trades at $26.00.Last year, the fund paid dividends of 40 cents a share and had capital gains distribution of $1.83 a share. Using approximate yield formula, what rate of return did Nigel earn on his investment? repeat the calculations using a handheld calculator would he have made a 20 percent rate of return if the stock had risen to $30 a share.
