The capital gain is subtracted from return to stockholders to calculate __________?
Correct answer: A. periodic dividend payments
- A. periodic dividend payments
- B. constant spot rate payment
- C. constant forward rate payment
- D. constant future rate payment
Explanation
A stockholder’s total return combines dividend income and capital gain, so removing the capital-gain component leaves the dividend return. Strictly, this gives dividend yield rather than the dollar amount of periodic dividend payments.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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