Question

John purchased 100 shares of Black Forest Inc. stock of at a price of  $150.68 three months ago. He sold all stocks today for  $158.29. During this period the stock paid dividends of  $4.69 per share. What is John’s annualized holding period return (annual percentage rate)?

Answer 1

= 32.7%

Step-by-step explanation:

Return on a stock is the sum of the dividends and the capital gains.

Capital gains = Sales value of stock - Cost of investment

= (158.29 -150.68 )× 100

= 761

Dividends = 4.69 ×100

=469

Cost of investment =150.68 ×100

Return in %

= Total return / cost of stocks ×100

=(761 + 469)/ (150.68 ×100 ) ×100

=8.2% for 3 months

Annualized return

=( 8.2 %/3 ) × 12

= 32.7%

Annualized return= 32.7%