George Wilson purchased Bright Light Industries common stock for $47.50 on January 31, 2010. The firm paid dividends of $1.10 during the last 12 months. George sold the stock today (January 30, 2011) for $54.00. What is George's holding period return?
A) 16.00%
B) 14.00%
C) 11.00%
D) 19.00%

Question

Quizplus · Accepted Answer

The holding period return is calculated as follows:Holding period return = (Ending price + Dividends - Purchase price) / Purchase priceEnding price = $54.00Dividends = $1.10Purchase price = $47.50Holding period return = ($54.00 + $1.10 - $47.50) / $47.50 = 16.00%

George Wilson Purchased Bright Light Industries Common Stock for $47