Ten months ago, Junior purchased a stock for $14 a share. The stock pays a quarterly dividend of $0.50 per share. Today, Junior sold the stock for $15 a share. What is his holding period return?

Question

Quizplus · Accepted Answer

The holding period return is calculated as follows:Holding period return = (Sale price - Purchase price + Dividends received) / Purchase price= ($15 - $14 + $0.50 x 4) / $14= $1.90 / $14= 0.1357= 13.57%Therefore, the holding period return is 13.57%, which is closest to choice D) 17.9%.

Ten Months Ago, Junior Purchased a Stock for $14 a Share