Rate Of Return

Posted on Jan 30, 2015

1) In common stock, the rate of return equals its dividend yield–calculated by dividing the annual dividend by the original purchase price. Rate of return may also refer to the total return, which is capital appreciation plus the dividend. 2) In fixed-income securities such as bonds and preferred stock, the rate of return equals the current yield, which is the coupon or dividend rate divided by the original purchase price.