Six months ago, Suzanne purchased a stock for $28 a share. Today she sold the stock at a price of $32 a share. During the time she owned the stock, she received a total of $1.30 in dividends per share. What is her holding period return?
A) 16.6%
B) 18.9%
C) 33.2%
D) 37.8%

Question

Quizplus · Accepted Answer

The holding period return (HPR) is calculated as the sum of the capital gain and any dividends received, divided by the initial purchase price. Suzanne's capital gain per share is $32 - $28 = $4. Adding the dividends of $1.30 per share, the total gain per share is $4 + $1.30 = $5.30. Dividing this by the initial price of $28 gives an HPR of $5.30 / $28 = 0.1893, or 18.9%.

Six Months Ago, Suzanne Purchased a Stock for $28 a Share