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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Investing in Stocks

Mr Sharma bought 100 shares of an Indian company at Rs 500 each. After one year he received a dividend of Rs 15 per share and sold the shares at Rs 550. Ignoring taxes and costs, what is his holding period return?

His holding period return is 13 percent. The capital gain is Rs 50 per share and the dividend is Rs 15, giving total gain of Rs 65 on a cost of Rs 500 per share. Dividing 65 by 500 gives 13 percent.

  1. A10%
  2. B13%Correct
  3. C15%
  4. D8%

Explanation

Total return per share = capital gain 50 + dividend 15 = 65. Return = 65/500 = 13%. Option A ignores the dividend, and option D is wrong because it uses the wrong gain.

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