Question

You purchased a share of stock for $29. One year later you received $2.40 as dividend and sold the share for $28. Your holding-period return was _________.

Answer 1

Answer:

4.83%

Explanation:

Given that

Income = 28

End of period value = 2.40

Original value = 29

Recall that

HPR = ((Income + (end of period value - original value)) / original value) × 100

Therefore,

HPR = 28 + (2.40 - 29)/29 × 100

= (28 + ( - 26.6) / 29) × 100

= (1.4 / 29) × 100

= 0.04827 × 100

= 4. 83%

Answer 2

Answer:

4.83%

Explanation:

Given that

Income = 28

End of period value = 2.40

Original value = 29

Holding period return is calculated as  Income + (end of period value - original value)) ÷ original value) × 100

Hence to calculate the Holding period value

= 28 + (2.40 - 29)/29 × 100

= (28 + ( - 26.6) / 29) × 100

= (1.4 / 29) × 100

= 0.04827 × 100

= 4. 83%