A stock has been reported to have a total holding return of 14% over the last...
A stock has been reported to have a total holding return of 14% over the last year. Last year the stock was purchased for $48 and recently sold for $52.32 after adjusting for the dividend that was to be paid soon. What is the value of this adjustment?
Homework Answers
Capital gain = $52.32-$48 = $4.32
Initial investment = $48
Stock holding return = (Capital gain+Dividend adjustment)/Initial investment
14% = (4.32+Dividend adjustment)/48
Dividend adjustment = (14%*48)-4.32
Dividend adjustment = $2.4
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