$3.73 / $24.50 = 15.2%
If the share had risen to $30, that would be an extra $4, making $7.73 which (7.73/24.5) is 31.6%
About a year ago, Nigel Palmer bought some shares in the Equity Partners 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 distributions of $1.83 a share. Using the approximate yield formula, what rate of return did Nigel earn on his investment? Repeat the calculation using a handheld financial calculator. Would he have made a 20 percent rate of return if the stock had risen to $30 a share?
