You bought 500 shares of stock for $42 per share two years ago. The stock paid annual dividends of $1.25 per share. The stock trades at $41 today. What is your holding period return?

a. 5.95 percent

b. 3.57 percent (correct)

c. 3.66 percent

d. 8.33 percent

B is the correct answer please show the procedure.