Use the table for the question(s)below.
Consider the following price and dividend data for Cockatoo Limited:

-Assume that you purchased Cockatoo shares at the closing price on 31 December 2015 and sold it after the dividend had been paid at the closing price on 26 January 2016. Your total return rate (yield)for this period is closest to:
A)0.70%
B)-8.80%
C)0.75%
D)-8.13%

Question

Use the table for the question(s)below.
Consider the following price and dividend data for Cockatoo Limited:
 
-Assume that you purchased Cockatoo shares at the closing price on 31 December 2015 and sold it after the dividend had been paid at the closing price on 26 January 2016. Your total return rate (yield)for this period is closest to:
A)0.70% 
B)-8.80% 
C)0.75% 
D)-8.13%

Quizplus · Accepted Answer

The total return rate or yield for a stock over a given period can be calculated by considering both the price appreciation (or depreciation) and the dividends received. The formula for total return rate is: $$ \text{Total Return Rate} = \left( \frac{\text{Ending Price} + \text{Dividends} - \text{Beginning Price}}{\text{Beginning Price}} \right) \times 100\% $$ Without the specific prices and dividend amount, we can't calculate the exact number here. However, given the options, a negative return indicates that the price of the stock decreased more than the dividend compensated for, leading to a net loss over the period. Option D, -8.13%, suggests a scenario where the decrease in stock price was not fully offset by the dividend received, resulting in a negative total return.

Use the Table for the Question(s)below