Rico bought 100 shares of banana republic stock for $24.00 per share on january 1, 2010. he received a dividend of $2.00 per share at the end of 2010 and $3.00 per share at the end of 2011. at the end of 2012, rico collected a dividend of $4.00 per share and sold his stock for $18.00 per share. what was rico’s realized holding period return?

Explanation:

To find the value of Holding Period Return we use the following formula:

HPR = ((Income + End of Period Value - Original Value) / Original Value) * 100.

Here,

Income = Sum of all dividends = $2 * 100 +$3 * 100 + $4 * 100 = $900

End of perio Value = $18 * 100 = $1800

Original Value = $24 * 100 = $2400

Finally we will substitute above values in HPR formula, we get

HPR =

HPR =

HPR = 12.5%.

Hence, the holding period return is 12.5%.

answer; yield to maturity;