Question

On February 1, you bought 100 shares of stock in the Francesca Corporation for $42 a share and a year later you sold it for $46 a share. During the year, you received a cash dividend of $1.20 a share. Compute your HPR and HPY on this Francesca stock investment. Round your answer for HPR to three decimal places. Round your answer for HPY to one decimal place

Answer 1

12.381%

Step-by-step explanation:

For computing HPY and HPR, the formula is same which is given below:

The formula to compute the HPY is shown below

= Dividend income + (Selling price - purchase price) ÷ purchase price

= ($1.20 + $46 per share - $42 per share) ÷ $42 per share

= ($1.20 + $4 per share) ÷ $42 per share)

= $5.20 per share ÷ $42 per share

= 12.381%