Suppose you invested $93 in the Ishares High Yield Fund (HYG) a month ago. It paid a dividend of $0.53 today and then you sold it for $94. What was your dividend yield and capital gains yield on the investment

Respuesta :

The dividend yield and capital gains yield on the investment are: 0.57%, 1.08%.

a. Dividend yield

Dividend yield = Dividend/Amount invested

Dividend yield =$0.53 / $94

Dividend yield= 0.57%

b. Capital gain yield

First step is to calculate the capital gain

Capital gain= $94 - $93

Capital gain= $1

Second step is to calculate the capital gains yield

Capital gains yield=Capital gain/Amount invested

Capital gains yield=$1 / $93

Capital gains yield= 1.08%

Inconclusion the dividend yield and capital gains yield on the investment are: 0.57%, 1.08%.

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