Question

You purchase a share of Boeing stock for $90. One year later, after receiving a dividend of $3, you sell the stock for $92. What was your holding-period return

Answer 1

Answer:

5.56%

Explanation:

Computation for holding-period return

Using this formula

Holding-period return =(Stock sales- Purchased Share + Dividend)/Purchased share

Let plug in the formula

Where,

Stock sales=92

Purchased Share=90

Dividend=3

Holding-period return=(92 - 90 + 3) / 90

Holding-period return=5/90

Holding-period return=0.0556×100

Holding-period return= 5.56%

Therefore the Holding-period return will be 5.56%