Chapter 4: Net Present Value

Apply the percentage return formula. Note that the stock price declined during the period. Since the stock price decline was greater than the dividend, your return was negative. Rt+1 = [Divt+1 + (Pt+1 – Pt)] / Pt = [$2.40 + ($31 - $42)] / $42 = -0.2048. The percentage return is –20.48%. Apply the holding period return formula. ................
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