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A B 1 Purchase price per share $57 2 Total commission $35 3 Dividend at year 1 $1.80 4 Dividend at second year $1.93 5 Number of shares bought 100 6 Total purchase price =B5*B1 7 Purchase price with commission =B6+B2 8 Selling price at the end of second year $59 9 Total selling price |=B8*B5 10 Commission on selling $44 11 Selling price net of commission =B9-B10 12 Total dividend in year 1 =B3*B5 13 Total dividend in year 2 =B4*B5 14 (a) Dividend yield at purchase =B12/B6 15 (b) Dividend yield at sale =B13/B9 16 (c) Total return |=B11+B12+B13-B7 17 Holding period return 18 (d) Annualized holding period yield =B16/B7 =(1+B17)^(1/2)-1

A B 1 Purchase price per share $57 2 Total commission $35 3 Dividend at year 1 $1.80 4 Dividend at second year $1.93 5 Number of shares bought 100 6 Total purchase price =B5*B1 7 Purchase price with commission =B6+B2 8 Selling price at the end of second year $59 9 Total selling price |=B8*B5 10 Commission on selling $44 11 Selling price net of commission =B9-B10 12 Total dividend in year 1 =B3*B5 13 Total dividend in year 2 =B4*B5 14 (a) Dividend yield at purchase =B12/B6 15 (b) Dividend yield at sale =B13/B9 16 (c) Total return |=B11+B12+B13-B7 17 Holding period return 18 (d) Annualized holding period yield =B16/B7 =(1+B17)^(1/2)-1

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 73E: Preferred Dividends Eastern Inc.s equity includes 8%, $25 par preferred stock. There are 100,000...
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A B 1 Purchase price per share $57 2 Total commission $35 3 Dividend at year 1 $1.80 4 Dividend at second year $1.93 5 Number of shares bought 100 6 Total purchase price =B5*B1 7 Purchase price with commission =B6+B2 8 Selling price at the end of second year $59 9 Total selling price |=B8*B5 10 Commission on selling $44 11 Selling price net of commission =B9-B10 12 Total dividend in year 1 =B3*B5 13 Total dividend in year 2 =B4*B5 14 (a) Dividend yield at purchase =B12/B6 15 (b) Dividend yield at sale =B13/B9 16 (c) Total return |=B11+B12+B13-B7 17 Holding period return 18 (d) Annualized holding period yield =B16/B7 =(1+B17)^(1/2)-1
Transcribed Image Text:A B 1 Purchase price per share $57 2 Total commission $35 3 Dividend at year 1 $1.80 4 Dividend at second year $1.93 5 Number of shares bought 100 6 Total purchase price =B5*B1 7 Purchase price with commission =B6+B2 8 Selling price at the end of second year $59 9 Total selling price |=B8*B5 10 Commission on selling $44 11 Selling price net of commission =B9-B10 12 Total dividend in year 1 =B3*B5 13 Total dividend in year 2 =B4*B5 14 (a) Dividend yield at purchase =B12/B6 15 (b) Dividend yield at sale =B13/B9 16 (c) Total return |=B11+B12+B13-B7 17 Holding period return 18 (d) Annualized holding period yield =B16/B7 =(1+B17)^(1/2)-1
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