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.

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

A.

R_G=(71.40-57.4375)/57.4375\approx24.309\%

R_D=1.80/57.4375\approx3.134\%

R=(71.40-57.4375+1.80)/57.4375\approx27.443\%

R=\frac{P_1-P_0+D}{P_0}

Component	Return
Capital gain	24.309%
Dividend yield	3.134%
Total return	27.443%