Asked by Gabriella Gonzales on Jul 21, 2024

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For a stock that does not pay a dividend, the total return can also be defined as the:

A) Risk premium plus the inflation rate.
B) Capital gains rate.
C) Real rate of return.
D) Financial rate of return.
E) Nominal after-tax rate of return.

Total Return

The complete return on an investment over a specified period, including both capital gains and income received.

Dividend

A portion of a company's earnings that is paid to shareholders or owners as a distribution of profits.

Capital Gains Rate

The tax rate applied to the profit made from selling an asset at a higher price than its purchase price.

  • Explain the elements and formulas used in determining nominal and real returns.
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CE
Courtney Esteban BrownJul 25, 2024
Final Answer :
B
Explanation :
The total return for a stock that does not pay a dividend is defined by the capital gains rate, which is the percentage change in the stock's price over a given period.