Answer:
The Rate of return expected from the stock is 14.47%
Step-by-step explanation:
Holding period return is the rate of return paid on the investment in the specific stocks in the form of dividend and appreciation in the value of the stock as well until the stock is held.
Firste we need to calculate the return on investment
Return on investment = Dividend Paid in the period + Appreciation in the value of stock
Placing values in the formula
Return on investment = $1.54 + ( $32.80 - $30 ) = $1.54 + $2.80 = $4.34
Now calculate the return rate as follow
Holding period return = ( Return on investment / Initial price of the stock ) x 100
Placing values in the formula
Holding period return = ( $4.34 / $30 ) x 100
Holding period return = 14.47%