Question

The Maestro bought 100 shares of a company's stock for $22.00 per share on January 1, 2018. He received a dividend of $2.00 per share at the end of 2018 and $3.00 per share at the end of 2019. At the end of 2020, the Maestro collected a dividend of $4.00 per share and sold his stock for $18.00 per share. The Maestro's realized holding period return was closest to:

Answer 1

$22.7%

Step-by-step explanation:

Purchase Price $22

Gains on stock during holding period

Dividend 2018 $2

Dividend 2019 $3

Dividend 2020 $4

Loss on sale of stock (18-22) ($4)

Total gain on per stock (2+3+4-4)=$5

Total Return on stock during holding period=$5/22=22.7%