Janet bought a share of stock for $47.50 that paid a dividend of $.72 and sold one year later for $51.38.What was her dollar profit or loss and holding period return?
A)$0.72,7.55%
B)$3.88,8.95%
C)$4.60,9.68%
D)$3.88,9.68%

Question

Quizplus · Accepted Answer

To calculate the dollar profit, we need to subtract the purchase price from the sale price and add any dividends received:

Profit = Sale Price - Purchase Price + Dividends
Profit = $51.38 - $47.50 + $0.72
Profit = $4.60

To calculate the holding period return, we need to divide the profit by the initial investment and express it as a percentage:

Holding Period Return = (Sale Price + Dividends - Purchase Price) / Purchase Price
Holding Period Return = ($51.38 + $0.72 - $47.50) / $47.50
Holding Period Return = 0.0968 or 9.68%

Therefore, the correct answer is C, $4.60 and 9.68%.

Janet Bought a Share of Stock for $47