You purchase a share of Boeing stock for $90.One year later, after receiving a dividend of $3, you sell the stock for $92.What was your holding-period return?
A)4.44%
B)2.22%
C)3.33%
D)5.56%

Question

Quizplus · Accepted Answer

First, we need to calculate the total return by adding the dividend income to the capital gain:

Total return = (ending stock price + dividend income - beginning stock price) / beginning stock price
Total return = (92 + 3 - 90) / 90
Total return = 0.0556 or 5.56%

Therefore, the holding-period return is 5.56%. The correct answer is D.

You Purchase a Share of Boeing Stock for $90