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QUESTION TWO A. An investor purchased 1000 shares of common stock at GHS20 per share one year ago. The company declared and paid a dividend
QUESTION TWO A. An investor purchased 1000 shares of common stock at GHS20 per share one year ago. The company declared and paid a dividend of GHS2 per share during the year. The investor sold the stock for GHS25 per share after the one-year holding period. Required: i. Calculate the cedi return from the investment 2 marks ii. Calculate the holding period return (HPR) for this investment 2 marks iii. Partition the HPR into dividend return and capital appreciation return components. 2 marks B. In the above purchase and sale of shares, if the broker charges two and half percent (243%) of the value of the purchase and sale of shares as required by the Ghana Stock Exchange (GSE), Required: i. Calculate the cedi return from the investment 3 marks ii. Calculate the HPR for this investment. 3 marks iii. Partition the HPR into dividend return and capital appreciation return components. 3 marks Total 15 marks
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