A stock purchased one year ago today at $10 per share is sold today at $15 per share. It has paid a dividend this year of $3. The investor's before-tax holding-period yield must be:
A) 12 percent
B) 20 percent
C) 40 percent
D) 60 percent
E) 80 percent

Question

Quizplus · Accepted Answer

The holding-period yield is calculated as (Ending Price - Beginning Price + Dividends) / Beginning Price. Here, it is ($15 - $10 + $3) / $10 = $8 / $10 = 0.8 or 80%.

A Stock Purchased One Year Ago Today at $10 Per