You buy a stock for $34 per share and sell it for $36 after you collect...

You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend. Your pre-tax holding period return is

		a. 5.56 percent
		b. 4.65 percent
		c. 2.94 percent
		d. 8.82 percent
		e. 5.88 percent

Solutions

Expert Solution

Ans d. 8.82 percent

Po =	Purchase Price
P1 =	Sale Price


Total Return on Shares =	Dividend + (P1 - P0))
	1 + 36 - 34
	3.00

Return on Shares in % =	Return on Share / P0 * 100
	3 / 34 * 100
	8.82%

jeff jeffy answered 2 years ago

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