Sign up  |  Log in

Solve this HPY prob

Investment in 10,000 common shares of a company for 1 year earned 15.5%. Investor received $2,500 dividend just prior to the sale of the shares at $24 per. The price that the investor paid for each share one year earlier was closest to blank.

    Make the most of your CFA® Progam prep in one weekend! Join renowned instructors Peter Olinto & David Hetherington in May for a live, two-day intensive final review class.

    Is the 15.5% pure price appreciation, or total return?

    Simplify the complicated side; don't complify the simplicated side.

    Financial Exam Help 123: The place to get help for the CFA® exams
    http://financialexamhelp123.com/

    Total return

    P0 = ($24 + $2,500/10,000) / 1.155.

    Simplify the complicated side; don't complify the simplicated side.

    Financial Exam Help 123: The place to get help for the CFA® exams
    http://financialexamhelp123.com/

    Do you have the right answer? I calculated it as:

    2500/10 000 = 0.25 dividend per share

    (24+0.25)/1.155 = 21

    Uruk wrote:
    Do you have the right answer? I calculated it as:

    2500/10 000 = 0.25 dividend per share

    (24+0.25)/1.155 = 21

    I don’t.

    You’re correct.

    My brain must have stopped working there for a minute.

    I’ve made the correction.

    Simplify the complicated side; don't complify the simplicated side.

    Financial Exam Help 123: The place to get help for the CFA® exams
    http://financialexamhelp123.com/

    21% , is it?

    Yes.

    Gurveer wrote:
    21% , is it?

    Not percent.

    Dollars.

    Simplify the complicated side; don't complify the simplicated side.

    Financial Exam Help 123: The place to get help for the CFA® exams
    http://financialexamhelp123.com/