XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Price $ 125 141 Year 2018 2019 2020 2021 120 125 Year-End $2 An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021. Arithmetic time-weighted average returns Geometric time-weighted average returns Date 01/01/2018 01/01/2019 64012320 2 Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2 2 Cash Flow 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.) % % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, 16 January 1, 2021. (Negative amounts should be indicated by a minus sign.) Date 01/01/2018 01/01/2019 01/01/2020 01/01/2021 Cash Flow b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.) Rate of return
XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Price $ 125 141 Year 2018 2019 2020 2021 120 125 Year-End $2 An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021. Arithmetic time-weighted average returns Geometric time-weighted average returns Date 01/01/2018 01/01/2019 64012320 2 Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2 2 Cash Flow 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.) % % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, 16 January 1, 2021. (Negative amounts should be indicated by a minus sign.) Date 01/01/2018 01/01/2019 01/01/2020 01/01/2021 Cash Flow b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.) Rate of return
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 2MAD
Related questions
Question
Accounting
Transcribed Image Text:XYZ stock price and dividend history are as follows:
Beginning-of-Year Dividend Paid at
Price
$ 125
141
Year
2018
2019
2020
2021
120
125
Year-End
$2
An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share
at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021.
Arithmetic time-weighted average returns
Geometric time-weighted average returns
Date
01/01/2018
01/01/2019
64012320
2
Required:
a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)
2
2
Cash Flow
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.)
%
%
Transcribed Image Text:b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, 16 January 1,
2021. (Negative amounts should be indicated by a minus sign.)
Date
01/01/2018
01/01/2019
01/01/2020
01/01/2021
Cash Flow
b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to
use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal
places.)
Rate of return
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