The holding-period return (HPR) on a share of stock is equal to
A) the capital gain yield during the period plus the inflation rate.
B) the capital gain yield during the period plus the dividend yield.
C) the current yield plus the dividend yield.
D) the dividend yield plus the risk premium.
E) the change in stock price.

Question

Quizplus · Accepted Answer

The holding-period return (HPR) on a share of stock is calculated by adding the capital gain yield (which is the percentage change in the stock price) to the dividend yield (dividends received divided by the initial stock price). This formula captures both the income from dividends and the capital appreciation (or loss) of the stock.

The Holding-Period Return (HPR) on a Share of Stock Is