Problem 1
On February 1, you bought 100 shares of stock in the Francesca Corporation for $34 a share and a year later you sold it for $39 a share. During the year, you received a cash dividend of $1.50 a share. Compute your HPR and HPY on this Francesca stock investment.
Solution
Given Data:
Number of shares = 100
Buying Price/share = $34
Selling price/share = $39
Cash dividend received/share = $1.5
As we sold the shares after one year so
HPR= Beginning Value of Investment Ending Value of Investment
HPR=(34×100)(39×100)+(1.5×100)
HPR=34003900+150
HPR=34004050
HPR=1.19
Now
HPY=HPR−1
HPY=1.19−1
HPY=0.19 or 19%