XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $3 Year 2018 2019 2020 2021 Beginning-of-Year Price An Investor buys six 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 seven remaining shares at the beginning of 2021. $ 120 145 115 120 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 Date 01/01/2018 01/01/2010 01/01/2020 01/01/2021 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.) Rate of return Cash Flow $ (720) (417) 139 868 4.00 % 3.61 % 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.) (5.0000) %

XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $3 Year 2018 2019 2020 2021 Beginning-of-Year Price An Investor buys six 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 seven remaining shares at the beginning of 2021. $ 120 145 115 120 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 Date 01/01/2018 01/01/2010 01/01/2020 01/01/2021 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.) Rate of return Cash Flow $ (720) (417) 139 868 4.00 % 3.61 % 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.) (5.0000) %

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 3E

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