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Investment A expects to pay quarterly dividends of $0.65 per share and is currently trading at $32.30 per share. You anticipate that you could sell
Investment A expects to pay quarterly dividends of $0.65 per share and is currently trading at $32.30 per share. You anticipate that you could sell the share for $35 in six months time.
Investment B expects to pay half yearly dividends of $4.20 and is currently trading at $22.30 per share. You anticipate that you could sell this share for $23.95 in 12 months time
a) Calculate the annualised holding period return for each investment
b) Assuming each of these investments carries the same degree of risk, which would you decide to invest in and why?
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