The holding period return on a share was 25%. Its ending price was $18 and its beginning price was $16. Its cash dividend must have been ________.
A)$0.25
B)$1.00
C)$2.00
D)$4.00

Question

Quizplus · Accepted Answer

The holding period return is the total return on an investment over a specific period of time. It includes both capital gains and dividends. In this case, the holding period return is 25%, which means that the total return on the investment was 25%. The ending price of the share was $18 and the beginning price was $16, which means that the capital gain was $2. The cash dividend must have been $2, which is the difference between the holding period return and the capital gain.

The Holding Period Return on a Share Was 25