Holding period return

Holding period return is the total return earned while an investment is held, equal to (ending price − beginning price + income received) ÷ beginning price.

ByHoang TruongUpdated July 11, 2026

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A share bought for €40 pays a €2 dividend and is later sold for €46. Price gain contributes €6 and the dividend contributes €2, for a total gain of €8 on the €40 invested. Holding period return is €8 ÷ €40, or 20%.

Where it fits

TopicRisk, Return & the CAPMCoreSubjectCorporate FinanceCore

The formula

LaTeX

HPR = \frac{P_1 - P_0 + CF}{P_0}

Variables

$P_{0}$: Beginning price (€)
$P_{1}$: Ending price (€)
$C F$: Income received during the holding period (e.g. dividend or coupon) (€)

The total return earned over the exact period an asset is held, combining price change and any income received during that period.

Check yourself

PracticeCORE

An investor buys a share for €120. During the holding period the share pays a €6 dividend, and it is then sold for €108. What is the holding period return?

Select an answer to check your understanding.