Joe bought a share of stock for $47.50 that paid a dividend of $0.72 and sold one year later for $51.38. What was Joe's dollar profit or loss and holding period return?
A. $0.72, 7.55%
B. $3.88, 8.95%
C. $4.60, 9.68%
D. $3.88, 9.68%
Answer: C. $4.60, 9.68%
Calculation: Total return=(End price-Beginning price+Dividends)
=(51.38-47.5+0.72)=$4.60
Hence holding period return=Total return/Beginning price
=(4.6/47.5)=9.68%(Approx).
Hence the correct option is C.
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