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The holding period return on a stock was 25%. Its beginning price was $25 and its...

The holding period return on a stock was 25%. Its beginning price was $25 and its cash dividend was $2.6. Its ending price must have been _________.

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Expert Solution

Ans 28.65

Po = Purchase Price
P1 = Sale Price
Total Return on Shares = (Dividend + (P1 - P0))   
25 * 25% = ( 2.6 + P1 - 25)
6.25 = ( 2.6 + P1 - 25)
6.25 = P1 - 22.4
P1 = 22.4 + 6.25
P1 = 28.65

jeff jeffy answered 2 years ago
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