Nico bought 100 shares of cisco systems stock for $30.00 per share on january 1, 2013. he received a dividend of $2.00 per share at the end of 2013 and $3.00 per share at the end of 2014. at the end of 2015, nico collected a dividend of $4.00 per share and sold his stock for $33.00 per share. what was nico's realized holding period return?

Question

Andrew Long

Business

13 December, 17:10

Nico bought 100 shares of cisco systems stock for $30.00 per share on january 1, 2013. he received a dividend of $2.00 per share at the end of 2013 and $3.00 per share at the end of 2014. at the end of 2015, nico collected a dividend of $4.00 per share and sold his stock for $33.00 per share. what was nico's realized holding period return?

+5

Answers (1)

Know the Answer?

Bentley Rowland · Answer 1

Jan. 1, 2013:

Initial investment = (100 shares) * ($30/share) = $3,000.

End of 2013:

Dividend collected = ($2/share) * (100 shares) = $200

End of 2014:

Dividend collected = ($3/share) * (100 shares) = $300

End of 2015:

Dividend collected = ($4/share) * (100 shares) = $400

Returns::

From sales of 100 shares = ($33/share) * (100 shares) = $3,300

From dividends = 200 + 300 + 400 = $900

Total returns = 3,300 + 900 = $4,200

Realized returns = Total returns - Initial inestment

= 4200 - 3000

= $1,200

Answer: $1,200