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Calculate the returns for suggesting the better stock

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Reference no: EM132956769

Mr. Ahmad intends to invest in a stock in order to enjoy an increase in his income. He finds out two stocks of his concern for the investment. The following information pertains to the said stocks:

Stock A: It was purchased 60 days ago at Rs. 1,000 and currently selling at Rs. 1,500. It has paid a divdend of Rs. 30.

Stock B: It was purchased 45 days ago at Rs. 700 and currently selling at Rs. 1,200. It has paid a dividend of Rs. 25.

Mr. Ahmad is confused in the selection of stock with maximum return.

Requirements:

Problem 1: As a student of Investment Analysis and Portfolio Management, you are required to calculate the returns for suggesting the better stock to Mr. Ahmad:

1. Dividend Yield and Capital Appreciation (%) on stock A and B.

2. Holding Period Return (HPR) on stock A and B.

3. Annual Holding Period Return (HPR) on stock A and B.

4. On the basis of above calculations, identify which stock is better for the investment and why?

 

Reference no: EM132956769

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