Question

You buy a stock at $25 and sell it 6 months later for $22. If your...

You buy a stock at $25 and sell it 6 months later for $22. If your HPR was 0%, how many dollars in dividends must you have received while holding the stock?

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Answer #1
The holding period return (HPR) is calculated
using the following method:
HPR = (Ending value - Beginning value + Dividends)/Beginning value
Ending value = 22
Beginning value = 25
HPR = 0%
HPR = (22 - 25 + x)/25
where x is the amount received in dividends
0% = (-3 + x)/25
x - 3 = 0
x = 3
You must have received $3 in dividends for the HPR to be 0%.
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