XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Year 2021 Price $ 134 2022 2023 2024 150 125 130 Year-End $ 3 3 3 3 An Investor buys five shares of XYZ at the beginning of 2021, buys another two shares at the beginning of 2022, sells one share at the beginning of 2023, and sells all six remaining shares at the beginning of 2024. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the Investor? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Answer is complete and correct. Arithmetic time-weighted average returns Geometric time-weighted average returns 1.97 1.20 % % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2021, to January 1, 2024. Note: Negative amounts should be indicated by a minus sign. Date Answer is complete and correct. Cash Flow 01/01/2021 01/01/2022 01/01/2023 01/01/2024 (670) ✓ (285) ✓ 146✓ 798 ✔ 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.) Note: Do not round Intermediate calculations. Negative value should be indicated by a minus sign. Round your answer to 4 decimal places. Answer is complete but not entirely correct. Rate of return 5.6721 %
XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Year 2021 Price $ 134 2022 2023 2024 150 125 130 Year-End $ 3 3 3 3 An Investor buys five shares of XYZ at the beginning of 2021, buys another two shares at the beginning of 2022, sells one share at the beginning of 2023, and sells all six remaining shares at the beginning of 2024. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the Investor? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Answer is complete and correct. Arithmetic time-weighted average returns Geometric time-weighted average returns 1.97 1.20 % % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2021, to January 1, 2024. Note: Negative amounts should be indicated by a minus sign. Date Answer is complete and correct. Cash Flow 01/01/2021 01/01/2022 01/01/2023 01/01/2024 (670) ✓ (285) ✓ 146✓ 798 ✔ 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.) Note: Do not round Intermediate calculations. Negative value should be indicated by a minus sign. Round your answer to 4 decimal places. Answer is complete but not entirely correct. Rate of return 5.6721 %
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 74E: Cumulative Preferred Dividends Capital stock of Barr Company includes: As of December 31, 2018, 2...
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I need help on the last part of the question that was marked incorrect. Thanks
Transcribed Image Text:XYZ stock price and dividend history are as follows:
Beginning-of-Year Dividend Paid at
Year
2021
Price
$ 134
2022
2023
2024
150
125
130
Year-End
$ 3
3
3
3
An Investor buys five shares of XYZ at the beginning of 2021, buys another two shares at the beginning of 2022, sells one share at the
beginning of 2023, and sells all six remaining shares at the beginning of 2024.
Required:
a. What are the arithmetic and geometric average time-weighted rates of return for the Investor?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Answer is complete and correct.
Arithmetic time-weighted average returns
Geometric time-weighted average returns
1.97
1.20
%
%
b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2021, to January 1, 2024.
Note: Negative amounts should be indicated by a minus sign.
Date
Answer is complete and correct.
Cash Flow
01/01/2021
01/01/2022
01/01/2023
01/01/2024
(670) ✓
(285) ✓
146✓
798 ✔
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.)
Note: Do not round Intermediate calculations. Negative value should be indicated by a minus sign. Round your answer to 4
decimal places.
Answer is complete but not entirely correct.
Rate of
return
5.6721 %
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