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You purchased 300 shares of General Electric stock at a price of $61.09 four years ago....

You purchased 300 shares of General Electric stock at a price of $61.09 four years ago. You sold all stocks today for $64.34. During that period the stock paid dividends of $1.92 per share. What is your annualized holding period return (annual percentage rate)

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Expert Solution

All units in $

Capital gains per share  = (sale price - purchase price) = (64.34-61.09) = 3.25

Dividend per share = 1.92

Total gain per share = 3.25+1.92=5.17

Total return % = (100*total gain) / purcahse price = (100*5.17)/61.09 = 8.463%

Annualized return = (1+ total return) ^(1/ no of years) - 1 = (1+8.463%)^(1/4) - 1 = 2.052%

jeff jeffy answered 2 years ago
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