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stranahan stranahan
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Posts: 3324
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2 years ago
Joe bought a share of stock for $47.50 that paid a dividend of $.72 and sold one year later for $51.38. What was Joe's dollar profit or loss and holding period return?
A) $3.88, 8.95%
B) $0.72, 7.55%
C) $3.88, 9.68%
D) $4.60, 9.68%
Textbook 

Financial Management: Core Concepts


Edition: 2nd
Author:
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portalgoal!portalgoal!
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Posts: 236
2 years ago
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D -- Profit = Ending Value+Distributions-Original Cost
Profit = $51.38 + $0.72 - $47.50 = $4.60.
HPR = (Ending Price + Distributions - Beginning Price/Beginning Price) = ($51.38 + $0.72 - $47.50/$47.50 ) = 9.68%
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