Are Dividends and Stock Returns Predictable? New Evidence ...

= capital gain return + dividend yield (gross) 1 + Rtotal t = P t + D t P ... Total return on Microsoft stock Buy stock in month t −1 at P t−1 = $85 and sell the stock the next month for P t = $90.Assume Microsoft pays a $1 dividend between months t −1 and t.The capital gain, dividend yield and total return ... ................
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