Raghubhai XYZ's stock price and dividend history are as follows:Beginning-of-YearPriceDividend Paid atYear-EndYear2018$ 134201920202021161121134$ 4444An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share atthe beginning of 2020, and sells all four remaining shares at the beginning of 2021.a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates ofreturn and final answers to 2 decimal places. Do not round other calculations.)Arithmetic average rate of returnGeometric average 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 turnsof the year for January 1, 2018, to January 1, 2021. If your calculator cannot calculate internal rate of return, you will have to use trialand error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.)Dollar-weighted rate of return%

Step 1: The calculation of the arithmetic return, geometric return, and dollar-weighted rate of…

Answered: XYZ's stock price and dividend history…

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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XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 120 $ 4 2019 144 4 2020 108 4 2021 120 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.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.) Arithmetic average rate of return 5.31% Geometric average 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 and…
XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 130 $ 2 2019 153 2 2020 128 2 2021 133 2 An investor buys five 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 six 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.) 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-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…
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XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2019 $ 180 $ 4 2020 200 4 2021 170 4 2022 180 4 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. 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.) 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, 2019, to January 1, 2022. (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.)
XYZ stock price and dividend history are as follows: Dividend Paid at Year-End Year 2018 2019 2020 2021 Beginning-of- Year Price $ 120 129 115 120 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. 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 % [%
XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Year 2018 2019 Price $ 140 159 132 137 2020 2021 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.) Date Cash Flow 01/01/2018 01/01/2019 01/01/2020 01/01/2021

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