Calculate Holding period returns for the following security : Particulars (₹) Investment made on April 1, 2022 50,000/- Dividends received during the year 2,500/- Investment sold on March 31, 2023 75,000/- Income Tax Rat

CS Executive · Corporate Accounting and Financial Management · PYQS · December 2024
Calculate Holding period returns for the following security : Particulars (₹) Investment made on April 1, 2022 50,000/- Dividends received during the year 2,500/- Investment sold on March 31, 2023 75,000/- Income Tax Rate on Dividends 30% Income Tax Rate on Capital Gains 20%

Answer & Explanation:

Calculation of Holding Period Return Gross Receipt (₹) Income Tax Rate Income Tax (₹) Net Receipt (₹) Dividends 2,500 30% 750 1,750 Capital Gains (₹75,000 - ₹50,000/-) 25,000 20% 5,000 20,000 Total Return 21,750 Total Investment = ₹50,000/- Holding Period Return = Net Receipt/Total Investment = ₹21,750/₹50,000 = 0.435 = 43.50% Alternative Answer: [(₹50,000 + ₹1,750 + ₹20,000)/₹50,000] -1 = .435 or 43.50%

Topics: Financial Management

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