Problem
Two years ago, you purchased 100 shares of Coca-Cola Company. Your purchase price was $61 a share, plus a total commission of $38 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.20 per share for the first year and $1.28 per share the second year. Also, assume that at the end of two years, you sold your Coca-Cola stock for $65 a share minus a total commission of $36 to sell the stock.
1. Calculate the dividend yield for your Coca-Cola stock at the time you purchased it.
2. Calculate the dividend yield for your Coca-Cola stock at the time you sold it.
3. Calculate the total return for your Coca-Cola investment when you sold the stock at the end of two years.
4. Calculate the annualized holding period yield for your Coca-Cola investment at the end of the two-year period.