The return to stockholders is 15% and the periodic dividend payments are 11.5% then the gains on capital are ___________?
Correct answer: B. 0.035
- A. 0.0265
- B. 0.035
- C. 0.013
- D. 0.043
Explanation
When total return equals dividend return plus capital gain, the capital gain is 15% − 11.5% = 3.5%, expressed as 0.035. The answer is therefore option b.
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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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