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Stock holding-period returns

EXERCISE 01

One year ago, 100 shares were bought at $57.4375 each. Today each share is worth $71.40; dividends during the year were $1.80 per share.

  1. A.Calculate the capital gain, dividend yield and total return.

A.

RG=(71.40−57.4375)/57.4375≈24.309%R_G=(71.40-57.4375)/57.4375\approx24.309\%
RD=1.80/57.4375≈3.134%R_D=1.80/57.4375\approx3.134\%
R=(71.40−57.4375+1.80)/57.4375≈27.443%R=(71.40-57.4375+1.80)/57.4375\approx27.443\%
R=P1−P0+DP0R=\frac{P_1-P_0+D}{P_0}
ComponentReturn
Capital gain24.309%
Dividend yield3.134%
Total return27.443%