a. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) Data as given in the problem are shown below: Goodman Industries Landry Incorporated Market Index Year Stock Price Dividend Stock Price Dividend Includes Divs. $2.23 $2.65 $2.73 $2.57 $2.23 $2.25 $85.12 $79.32 $74.32 $87.12 $95.12 $84.25 $30.32 $3.52 $3.65 $3.45 $3.47 $3.55 2020 18,475.97 12,174.55 12,019.97 10,743.05 9,455.42 8,163.96 2019 $23.53 $28.61 $15.21 2018 2017 $12.63 $13.21 2016 2015 $3.25 We now calculate the rates of retun for the two companies and the index: Goodman Landry Index 2020 2019 2018 2017 2016 Average Note: To get the average, you could get the column sum and divide by 5, but you could also use the function wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for Goodman and then copy the cell for the other items.
a. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) Data as given in the problem are shown below: Goodman Industries Landry Incorporated Market Index Year Stock Price Dividend Stock Price Dividend Includes Divs. $2.23 $2.65 $2.73 $2.57 $2.23 $2.25 $85.12 $79.32 $74.32 $87.12 $95.12 $84.25 $30.32 $3.52 $3.65 $3.45 $3.47 $3.55 2020 18,475.97 12,174.55 12,019.97 10,743.05 9,455.42 8,163.96 2019 $23.53 $28.61 $15.21 2018 2017 $12.63 $13.21 2016 2015 $3.25 We now calculate the rates of retun for the two companies and the index: Goodman Landry Index 2020 2019 2018 2017 2016 Average Note: To get the average, you could get the column sum and divide by 5, but you could also use the function wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for Goodman and then copy the cell for the other items.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
The attached file contains hypothetical data for working this problem. Goodman Corporation’s and Landry Incorporated’s stock prices and dividends, along with the Market Index, are shown in the file. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends.
- Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the
capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate therate of return for 2015 because you do not have 2014 data.)
Transcribed Image Text:A
C
D
F
1
2 a. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then
calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting
the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital
5 gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the
index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.)
4
7
8
Data as given in the problem are shown below:
9.
Goodman Industries
Landry Incorporated
Market Index
10
Year
Stock Price
Dividend
Stock Price
Dividend Includes Divs.
$30.32
$2.23
$2.65
$2.73
$2.57
$2.23
$2.25
$85.12
$79.32
$74.32
$87.12
$95.12
$84.25
$3.52
$3.65
$3.45
$3.47
$3.55
$3.25
11
2020
18,475.97
12,174.55
12,019.97
10,743.05
9,455.42
8,163.96
2019
$23.53
$28.61
$15.21
$12.63
$13.21
12
13
2018
14
2017
15
2016
16
2015
17
18 We now calculate the rates of retun for the two companies and the index:
19
20
Goodman
Landry
Index
21
2020
22
2019
23
2018
24
2017
25
2016
26
27 Average
28
29 Note: To get the average, you could get the column sum and divide by 5, but you could also use the function
30 wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for
31 Goodman and then copy the cell for the other items.
32
Expert Solution
Step 1
Given:
The stock prices and dividends of Goodman industries, laundry incorporated and market index are given.
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