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Holding Period and Stock Returns

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Sarah purchased 100 shares of General Electric stock of at a price of $58.24 three months ago. She sold all stocks today for $62.86. During the year the stock paid dividends of $2.45 per share. What is Sarah's holding period return?

Mary purchased 200 shares of Harley Davidson Co. stock of at a price of $95.72 six months ago. She sold all stocks today for $95.42. During the year the stock paid dividends of $4.12 per share. What is Mary's holding period return?

You purchased 250 shares of General Motors stock of at a price of $89.58 two years ago. You sold all stocks today for $80.50. During this period the stock paid dividends of $5.94 per share. What is your annualized holding period return (annual percentage rate)?

You purchased 300 shares of General Electric stock of at a price of $78.73 four years ago. You sold all stocks today for $63.65. During that period the stock paid dividends of $2.67 per share. What is your annualized holding period return (annual percentage rate)?

John purchased 100 shares of Black Forest Inc. stock of at a price of $151.68 three months ago. He sold all stocks today for $158.67. During this period the stock paid dividends of $6.98 per share. What is John's annualized holding period return (annual percentage rate)?

John purchased 100 shares of SoftDrink Co. stock at a price of $70.99 three months ago. He sold all stocks today for $69.88. During that period the stock paid dividends of $4.57 per share. What is John's effective annual rate?

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1 Sarah purchased 100 shares of General Electric stock of at a price of $58.24 three months ago. She sold all stocks today for $62.86. During the year the stock paid dividends of $2.45 per share. What is Sarah's holding period return?

No of shares= 100

Selling price per share= $62.86
Purchase price per share= $58.24
Capital Gains= $4.62 = $62.86 - $58.24

Capital Gains Yield= 7.93% = $4.62 / $58.24

Dividend per share= $2.45
Dividend Yield= 4.21% = $2.45 / $58.24

Holding Period Return = Capital Gains Yield + Dividend Yield= 12.14% = 7.93% + 4.21%

(Note, since we are calculating rates, return per share would be the same as return per hundred shares)

Purchase price for 100 shares= $5,824 = 100 x $58.24
Capital Gains for 100 shares= $462 = 100 x $4.62
Dividends for 100 shares= $245 = 100 x $2.45

Capital Gains Yield= 7.93% = $462. / $5,824.
Dividend Yield= 4.21% = $245. / $5,824.
Holding Period Return = 12.14% = 7.93% + 4.21%

Answer: Holding Period Return= 12.14%

2 Mary purchased 200 shares of Harley Davidson Co. stock of at a price of $95.72 six months ago. She sold all stocks today for $95.42. During the year the stock paid dividends of $4.12 per share. What is Mary's holding period return?

No of shares= 200

Selling price per share= $95.42
Purchase price per share= $95.72
Capital Gains/ Loss= ($0.30) = $95.42 - $95.72

Capital Gains Yield= -0.31% = -$.3 / $95.72

Dividend per share= $4.12
Dividend Yield= 4.30% = $4.12 / $95.72

Holding Period Return = Capital Gains Yield + Dividend Yield= 3.99% = -.31% + 4.3%

(Note, since we are calculating rates, return per share would be the same as return per hundred ...

Solution Summary

The solution answers questions on holding period return, annual percentage rate, and effective annual rate.

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What is the holding period return of the bond the common stock and the mutual fund?

The first investment is a bond which was purchased on May 10, 2005, and the purchase price was $20,000 the bond was later sold on May 12, 2005, the sales proceeds were $19,500. Interest on the bond from May 10, 2004 to May 12, 2005, was $2,100.

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What is the holding period return of the bond the common stock and the mutual fund?

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