XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Price Year 2018 2019 2020 2021 $ 140 159 132 137 Year-End $ 4 4 4 4 An investor buys five 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 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 intermediate calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns % % 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.)

XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Price Year 2018 2019 2020 2021 $ 140 159 132 137 Year-End $ 4 4 4 4 An investor buys five 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 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 intermediate calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns % % 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.)

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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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.) % %
ADC 1) Based on End-of-Chapter Problem 6 in Chapter 5 The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end- of-year price depend on the state of the economy by the end of the year as follows: Stock Price Dividend. $2.00 $50 1.00 43 0.50 34 a. Calculate the expected holding-period return and standard deviation of the holding- period return. All three scenarios are equally likely. Boom Normal economy Recession b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 4%.
Using the P/E ratio approach to stock valuation, caclulate the value of a share of stock of Wallmart where expected earnings per share (EPS) are $ 4.25 and similar shares of stock sell at multiples (P/E) of 35.69 times earnings per share (EPS) a. $ 35.69 b. $ 151.68 c. $ 141.68 d. $ 4.25
You purchased a stock at a price of $56.04. The stock paid a dividend of $2.31 per share and the stock price at the end of the year is $62.59. What is the capital gains yield? Multiple Choice 10.46% 15.81% 9.94% 4.12% 11.69%
A. If a security offers a dividend amounting to P 5.23/ share and an investor purchased 200 shares at P 77.50/share, what is his Total Investment Return at the end of the year if the share price increased by 8%? Based on the given above, compute for the Dividend Yield Rate, Capital Gains Rate, and Total Investment Return Rate. Dividend Yield Rate: Dt+1/Pt = (P5.23+1/77.50) = 0.06748 or 6.748% Capital Gains Rate: (Pt+1-Pt) /Pt = 77.50 x 8%= 6.2 = 77.50/6.2= 83.7 = 83.7-77.50 = 6.2/77.50 = 0.08 or 8% Total Investment Return Rate: (Dt+1+Pt+1-Pt) /Pt = (5.23+1+83.7-77.50)/ 77.50 = 0.147 or 14.7%
You have the following share price of XYZ. DATE Price 2-Mar-2021 $100 3-Mar-2021 $60 4-Mar-2021 $40 5-Mar-2021 $100 Investor B bought 100 shares of XYZ on 2-Mar-2021 and sold all the shares on 5-Mar-2021. Which answer is the closest value to the arithmetic average rate of return for the investor? A. 20% B. 15% C. 25% D. 0%
Required: A common stock pays an annual dividend per share of $2.10. The risk-free rate is 7% and the risk premium for this stock is 4%. If the annual dividend is expected to remain at $2.10, what is the value of the stock? (Round your answer to 2 decimal places.) Stock value
XYZ stock price and dividend history are as follows: Beginning-of- $ 104 Year 2018 Year Price 2019 2020 2021 115 90 105 Dividend Paid at Year-End $ 2 2 2 2 An investor buys three shares of XYZ at the beginning of 2018, buys another one shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all three 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 intermediate calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns % % 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.) Date Cash Flow 01/01/2018 01/01/2019 01/01/2020 01/01/2021
You bought a stock on 1 January 2018 for $135.5 and below are the year-end price data and annual dividends for the stock: Date Closing Price Annual Dividend 31 December 2017 135.5 3.6 31 December 2018 138.2 3.65 31 December 2019 136.8 3.5 31 December 2020 140.7 3.7 What is the standard deviation of returns on this stock over the 2018-2020 period? 0.0173 0.0005 0.0009 0.0212 O 0.0303
XYZ's stock price and dividend history are as follows: Beginning-of-Year Dividend paid at Price $ 102 122 92 102 Year 2018 2019 2020 2021 Year-End $4 Arithmetic average rate of return Geometric average rate of return 4 An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four remaining shares at the beginning of 2021. 4 4 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 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, 2018, to January 1, 2021. If your calculator cannot calculate internal rate of return, you will have to use trial i and error.) (Round your answer to 4…
Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $43.00 At the end of year 1, you receive a dividend of $2, and buy one more share for $47.00. At the end of year 2, you receive total dividends of $4 (e., $2 for each share), and sell the shares for $55.00 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.) Return 1%
1. Spark has paid the following dividends during 2021-2022: Date 9 April 2021 1 October 2021 8 April 2022 7 October 2022 The price of Spark shares at the start of 2021, 2022, and 2023 are Date 5 January 2021 5 January 2022 4 January 2023 (a) What is the HPR for 2021? What is the HPR for 2022? Dividend 12.5c 12.5c 12.5c 12.5c Price 4.80 4.49 5.34

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