Rate of Return on an asset for a given period (usually a period of one year) is defined as.
![Image 56](https://www.vskills.in/lms/wp-content/uploads/2016/06/Image-56-1.jpg)
Illustration:
Price at the beginning of the year : Rs.75
Dividend paid at the end of the year : Rs.3
Price at the end of the year : Rs.90
Therefore the rate of return on this stock is
![Image 57](https://www.vskills.in/lms/wp-content/uploads/2016/06/Image-57-1.jpg)
This rate of return may be broken down as follows
![Image 58](https://www.vskills.in/lms/wp-content/uploads/2016/06/Image-58-1.jpg)
Thus we have 4 % current yield and 2% capital gains yield.