Nico bought 100 shares of Cisco Systems stock for $30.00 per share on January 1, 2018. He received a dividend of $2.00 per share at the end of 2018 and $3.00 per share at the end of 2019. At the end of 2020, Nico collected a dividend of $4.00 per share and sold his stock for $33.00 per share. What was Nico's realized holding period return?

Question

Business

Harold Gregory

14 January, 11:32

Nico bought 100 shares of Cisco Systems stock for $30.00 per share on January 1, 2018. He received a dividend of $2.00 per share at the end of 2018 and $3.00 per share at the end of 2019. At the end of 2020, Nico collected a dividend of $4.00 per share and sold his stock for $33.00 per share. What was Nico's realized holding period return?

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Felicity · Answer 1

40%

Explanation:

The computation of the Nico's realized holding period return is shown below:

= (End year price - beginning year price + dividend per share at the end of 2018 + dividend per share at the end of 2019 + dividend per share at the end of 2020) : (beginning year price)

= ($33 per share - $30 per share + $2 per share + $3 per share + $4 per share) : ($30 per share)

= ($12 per share) : ($30 per share)

= 40%