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13 July, 11:46

John purchased 100 shares of Black Forest Inc. stock of at a price of $150.68 three months ago. He sold all stocks today for $158.29. During this period the stock paid dividends of $4.69 per share. What is John's annualized holding period return (annual percentage rate) ?

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  1. 13 July, 14:57
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    = 32.7%

    Explanation:

    Return on a stock is the sum of the dividends and the capital gains.

    Capital gains = Sales value of stock - Cost of investment

    = (158.29 - 150.68) * 100

    = 761

    Dividends = 4.69 * 100

    =469

    Cost of investment = 150.68 * 100

    Return in %

    = Total return / cost of stocks * 100

    = (761 + 469) / (150.68 * 100) * 100

    =8.2% for 3 months

    Annualized return

    = (8.2 %/3) * 12

    = 32.7%

    Annualized return = 32.7%
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