Question

At the beginning of last year, you invested $2,500 in 50 shares of the Chang Corporation. During the year, Chang paid dividends of $7 per share. At the end of the year, you sold the 50 shares for $58 a share. Compute your total HPY on these shares and indicate how much was due to the price change and how much was due to the dividend income. Do not round intermediate calculations. Round your answers to one decimal place.

Answer 1

The return on investment will be 30%

Step-by-step explanation:

holding period return (HPY): the return on investment during the time ity hold the share. It considers the return on dividends and also the gains or loss from the variance in the share price

returns:

dividends: 7

increase in share price: 58 - 50 = 8

Total return: 15

Investment

50

HPY: 15/50 = 0.3 = 30%