Question

The holding-period return on a stock was 32%. Its beginning price was $25, and its cash dividend was $1.50. Its ending price must have been _________. A. $28.50 B. $33.20 C. $31.50 D. $29.75

Answer 1

Answer:

$31.50

Explanation:

The holding period return on a stock was 32%

= 32/100

=0.32

Its beginning price was $25

Cash dividend was $1.50

Therefore, the ending price can be calculated as follows

= 0.32($25)-$1.50+25

= $8-$1.50+25

= 6.5+25

= $31.50

Hence the ending price must have been $31.50