Answer :
The annual holding-period return is 14.47%, here option C is correct answer.
The entire return made on an investment while it was held is known as the holding period return (also known as yield). A holding period is the time frame during which an investor holds an investment or the interval between buying and selling a security.
Dividends are payments a business gives to its stockholders as a means of sharing earnings. They are one of the ways investors receive a return on their stock investments because they are paid on a regular basis.
Holding period return = (dividend + price at end of year - price at beginning) / price at beginning × 100
= (2.50 + 41 - 38) ÷ 38 × 100
= 5.50 ÷ 38 × 100
= 14.47%.
Complete question:
The price of a stock is $38 at the beginning of the year and $41 at the end of the year. If the stock paid a $2.50 dividend, what is the holding-period return for the year?
A. 6.58%
B. 8.86%
C. 14.47%
D. 18.66%
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