4XYZ stock price and dividend history are as follows:Beginning-of-YearYear PriceDividend Paid atYear-End2018$ 120$ 2201912922020pints202122115120An investor buys six shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at thebeginning of 2020, and sells all seven remaining shares at the beginning of 2021.Required:a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediatecalculations. Round your answers to 2 decimal places.)× Answer is complete but not entirely correct.Arithmetic time-weighted average returnsGeometric time-weighted average returns1.99%1.59%b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021.(Negative amounts should be indicated by a minus sign.)Answer is complete but not entirely correct.Date01/01/2018Cash Flow$(720)Return to ques

To correctly calculate the arithmetic and geometric average time-weighted rates of return for the…

Answered: 4 XYZ stock price and dividend history…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Return on Common Stock You buy a share of The Ludwig Corporation stock for $18.50. You expect it to pay dividends of $1.00, $1.0510, and $1.1046 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $21.48 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places. % Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. %
Problem 2-12 (Algo) Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period. Stock Po A B P1 01 P2 02 00 140 145 145 145 145 145 135 290 130 290 130 290 270 290 280 290 145 580 C Required: Calculate the first-period rates of return on the following indexes of the three stocks (t = 0 to t = 1): Note: Do not round intermediate calculations. Round your answers to 2 decimal places. a. A market-value-weighted index. b. An equally weighted index. a. Rate of return b. Rate of return % %
Suppose that an investor purchases the common stock at the current market price of $58/share and simultaneously sells for $12 a call to buy the shares at the strike price of $50. At the expiration of the call, price of stock is $77. What is the net profit on the position for this investor? (Round your answer the nearest dollar, do not enter with the dollar sign)
A company has earnings per share of $3.75 and P/E of 47. What is the stock price? Question 12 options: $174.08 $176.25 $185.95 $112.98
o The following information is available concerning the price evolution of Microsoft stocks between 2016-2019 and the dividends paid by them. Date March 1, 2016 April 1, 2016 July 1, 2016 March 1, 2017 March 1, 2019 Close price 55.23 49.87 56.68 65.86 117.94 Total Dividends - 0.36 1.50 4.88 o Requirements: Considering that you bought Microsoft shares on March 1, 2016, compute the holding-period return for each maturity • Annualize the holding-period returns using EAR and APR • Comment on the results
ration has outstanding 9,600 shares of $100 par value, 6% preferred stock and 57,000 shares of $10 par value common stock. The preferred stock was issued in January 2020, and no dividends were declared in 2020 or 2021. In 2022, Oriole declares a cash dividend of $307,000. (a) Assume that the preferred are noncumulative. How much dividend will the preferred stockholders receive? Preferred stockholders would receive 2$ How much dividend will the common stockholders receive? Common stockholders would receive 24 (b) Assume that the preferred are cumulative. How much dividend will the preferred stockholders receive? 10:37F 77°F Type here to search
30. Questions 30 and 31 are related. Use the following information regarding an equal-weighted equity index and assume that all dividend payments are made at the end of the year and are reinvested in the stock that paid the dividend. Security Price at the End of 2021 Price at the End of 2022 Dividends per Share A $26 $0.50 B $45 $0.20 C $36 $0.40 Ꭰ $135 $0.50 Note: The dollar value of the index on December 31, 2021 is $10,000 and using a divisor of 100, the index level equals 100. a. b. C. 31. a. b. C. The weight of Security B in the index on December 31, 2022 with dividends reinvested and before rebalancing is closest to: 16.75% 18.55% 19.24% $25 $50 $31.25 $100 7.35% 7.87% The total return on the index referenced in the previous question for the year 2022 is closest to: 8.90% d. 22.16% e. 23.33% f. 25.00% d. 10.53% e. 12.10% f. 12.54%
XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2019 $ 155 2020 185 2021 145 2022 155 Arithmetic average rate of return Geometric average rate of return An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells one share at the beginning of 2021, and sells all four remaining shares at the beginning of 2022. $ 3 3 3 Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) % % Dollar-weighted rate of return wwww 3 % b. What is the dollar-weighted rat of return? (Hint. Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2019, to January 1, 2022. If your calculator cannot calculate IRR, you will have to use trial and error or a spreadsheet…
You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $38; (ii) $40; (iii) $44? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock Price Rate of Return 38 40 % 44 %
A 288.
Return on Common Stock You buy a share of The Ludwig Corporation stock for $18.40. You expect it to pay dividends of $1.08, $1.1491, and $1.2226 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $22.16 at the end of 3 years. a. Calculate the growth rate in dividends. Round your answer to two decimal places. % b. Calculate the expected dividend yield. Round your answer to two decimal places. % c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return? (Assume the market is in equilibrium with the required return equal to the expected return.) Do not round intermediate calculations. Round your answer to two decimal places. %
XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price 2019 2020 2021 2022 $88 108 78 88 Dividend Paid at Year-End $4 An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells one share at the beginning of 2021, and sells all four remaining shares at the beginning of 2022 Arithmetic average rate of return Geometric average rate of return Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Dollar-weighted rate of return 4 4 4 % % b. What is the dollar-weighted rate of return? (Hint Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2019, to January 1, 2022. If your calculator cannot calculate IRR, you will have to use trial and error or a spreadsheet program.) (Round your…

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