The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio managerbelieves these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnellshareholders approve a 3-for-1 stock split on January 1, 2020.Douglas McDonnellDynamics GeneralInternational RockwellNew divisor2.322Rate of returnShares(millions)3404504101/1/19$103%4574Pricea. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimalplaces.)1/1/20$1063963Check my work1/1/21$1185379b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price onJanuary 1, 2021, is $39.33 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to2 decimal places.)

Stock split:Stock split is typically done to increase the liquidity and affordability of the stock,…

Answered: shareholders approve a 3-for-1 stock…

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

See similar textbooks

Similar questions

(please use Excel) Preferred stock B sells for $45 in the market and pays an annual dividend of $4.60.a) If the market required yield is 10 percent, what is the value of the stock to investors?b) Should investors buy the shares? Include reasons
You have found the following stock quote for RJW Enterprises, Incorporated, in the financialpages of today's newspaper. YTD % Change Stock SYM YLD PE Last Net Change -1.1 RJWEnterprises RWJ 2.5 15 108.00-.42 a. What is the annual dividend? (Do not roundintermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Whatwas the closing price for this stock that appeared in yesterday's paper c. If the companycurrently has 30 million shares of stock outstanding, what was net income for the most recentfour quarters? (Do not round intermediate calculations and enter your answer in dollars, notmtermediate calculations and round your answer to 2 decimal
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)
Want accurateanswer
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
Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You believe they should be $30 per share, and are thus overvalued. December 2023 put options on a strike price of $60 per share are currently valued at $5. Each put contract is based on 100 shares. a.) What is your net dollar profit or loss as a holder of the put contract (based ona contract size of 100 shares) if we arrive at expiry in December and you are wrong and Company B shares are selling for $100?
Calculate the price weighted index value for 31 Dec 2020, prior to the splits. Shares W and X had 2 for 1 splits after the close on 31 Dec 2020. The pre-split divisor was 4. Share W X Y Z Select one: O A. 121.25 O B. 72.5 O C. 81.69 O D. 100.0 31-Dec-20 Closing Price $ 75.00 $ 150.00 $ 25.00 $ 40.00 31-Dec-20 Shares 10,000 5,000 20,000 25,000 31-Dec-21 Closing Price $50.00 $65.00 $35.00 $50.00 31-Dec-21 Shares 20,000 10,000 20,000 25,000
The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell New divisor Shares (millions) 180 325 370 Rate of return 1/1/19 $ 60 68 97 Price 1/1/20 $ 64 64 86 a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) 1/1/21 $77 78 100 b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1, 2021, is $23.42 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Please complete answer
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…
Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You believe they should be $30 per share, and are thus overvalued. December 2023 put options on a strike price of $60 per share are currently valued at $5. Each put contract is based on 100 shares. a.) What is your net dollar profit or loss as a holder of the put contract (based ona contract size of 100 shares) if we arrive at expiry in December and you are wrong and Company B shares are selling for $100? (Show your working in full)
Baghiben

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS