Question

(Round to two decimal places)

In January 2012, an investor purchased 300 shares of Engulf & Devour, a rapidly growing high-tech conglomerate. From 2012 through 2016, the stock turned in the following dividend and share price performance: E: On the basis of this information, find the annual holding period returns for 2012 through 2016. (Hint: See Chapter 4 for the HPR formula.) i Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Share Price Dividends Paid Share Price Year Beginning of Year during Year End of Year 2012 $39.26* $0.75 $49.02 2013 $49.02 $0.99 $63.45 2014 $63.45 $0.96 $61.06 2015 $61.06 $1.65 $44.23 2016 $44.23 $2.05 $111.07 *Investor purchased stock in 2012 at this price. Print Done

Answer 1

Answer:

Annual holding period return = (share price at the end of year - share price at beginning of year + dividend paid during the year) / share price at beginning of year

Year 2012 Share Price Beginning of Year (SB) $39.26 $49.02 $63.45 $61.06 $44.23 Dividend Paid | Share Price during the year End of Year (D) (SE) $0.75 $49.02 $0.99 $63.45 $0.96 $61.06 $1.65 $44.23 $2.05 $111.07 Annual Holding period Return (SE - SB+D)/SB 26.77% 31.46% -2.25% -24.86% 155.75% 2013 2014 2015 2016