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Calculate the annual holding period return on each security

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Reference no: EM13892227

Information about three securities appears below.

 

 

Beginning-of-year Price

End-of-year Price

Interest/dividend paid

Stock 1

$ 42.50

$ 46.75

$ 1.50

Stock 2

$ 1.25

$ 1.36

$ 0.00

Bond 1

$1,020

$1,048

$41.00

a. Assuming interest and dividends are paid annually, calculate the annual holding period return on each security.

b. During the year, management of Stock 2 spent $10 million, or $0.50 a share, repurchasing 7.7 million of the company's shares. How, if at all, does this information affect calculation of the hold- ing period return on Stock 2?

Reference no: EM13892227

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