Question

Today, you sold 1 share of Litchfield Design stock. The percentage return over the past quarter (from 3 months ago to today) for these shares was 4.13 percent. You purchased the shares 3 months ago at a price of 67.44 dollars per share. You just received 4.24 dollars in dividends. What was the price of the stock when you sold it?

Answer 1

Holding Period Return = [(Current share price - Initial share price paid) + Coupon payments received] / Initial share price paid --> Holding Period Return x Initial share price paid = (Current share price - Initial share price paid) + Coupon payments received --> (Holding Period Return x Initial share price paid) - Coupon payments received = Current share price - Initial share price paid --> Current share price = (Holding Period Return x Initial share price paid) - Coupon payments received + Initial share price paid Holding Period Return Initial share price paid Coupon payments received Current share price 4.13% $67.44 $4.24 $65.99 {($4.13% x $67.44) - $4.24 + $67.44 = $2.785272 - $4.24 + $67.44 = $65.99]