XYZ's stock price and dividend history are as follows: Dividend Paid Beginning-of- Year 2020 Year Price...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
XYZ's stock price and dividend history are as follows: Dividend Paid Beginning-of- Year 2020 Year Price at Year-End $ 120 $ 5 2021 2022 2023 150 110 120 5 5 5 An investor buys three shares of XYZ at the beginning of 2020, buys another two shares at the beginning of 2021, sells one share at the beginning of 2022, and sells all four remaining shares at the beginning of 2023. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? Note: 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, 2020, to January 1, 2023. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) Note: Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign. a. Arithmetic average rate of return a. Geometric average rate of return b. Dollar-weighted rate of return % % % XYZ's stock price and dividend history are as follows: Dividend Paid Beginning-of- Year 2020 Year Price at Year-End $ 120 $ 5 2021 2022 2023 150 110 120 5 5 5 An investor buys three shares of XYZ at the beginning of 2020, buys another two shares at the beginning of 2021, sells one share at the beginning of 2022, and sells all four remaining shares at the beginning of 2023. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? Note: 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, 2020, to January 1, 2023. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) Note: Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign. a. Arithmetic average rate of return a. Geometric average rate of return b. Dollar-weighted rate of return % % %
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
What implications might the difference in initial training provision between the USA and Germany have for the organisation of work and the character of relationships between managers and...
-
An airline pilot climbs to a new flight level along the path shown. The motion of the airplane between A and B is defined by the relation s = 3t (180 ? t), where s is the arc length in feet, t is the...
-
Explain how earnings management differs from fraud.
-
Taylor Company recently purchased a piece of equipment for \(\$ 2,000\) that will be paid for within 30 days after delivery. At what point will the event be recorded in Taylor's accounting system? a....
-
An enterprising student has set up an internship clearinghouse for business students. Each student who uses the service fills out a form and lists up to 10 companies that he or she would like to have...
-
1. Determine the following limits (if they exist). (2 marks each) a. lim (3x + 2x2 - 5) b. lim C +5 c. lim x3+3-20 8-2
-
- Design programs to maximize the learning of children who are having problems in school. - Select a specific theoretical orientation that you strongly "believe in" and design a program that fits...
-
During 2009, Signature Lamp Company completed these transactions: 1. Sales revenue on account, \(\$ 400,000\) (ignore cost of goods sold). 2. Collections on account, \(\$ 420,000\). 3. Write-offs of...
-
In classical statistical sampling, what three steps are used to obtain the sample results?
-
An auditor selects a preliminary sample of 100 items out of a population of 1,000 items. The sample statistics generate an arithmetic mean of \($60\), a standard deviation of \($6\), and a standard...
-
An important statistic to consider when using a classical statistical sampling audit plan is the population variability. The population variability is measured by the a. Sample mean. b. Standard...
-
The following list of tests is typical of those usually performed by auditors in gathering evidence to ascertain the fairness of financial statement balances. For each listed test, indicate whether...
-
I am trying to figure out the average blade weigh and how much variability is occuring in the measurements of blade weights. Then assuming the data is normal, what is the probabilty that blade...
-
What do you think?
-
Karanga Company purchased land containing an estimated 20 million tons of ore for a cost of $6,600,000. The land without the ore is estimated to be worth $1,200,000. The company expects that all the...
-
The airline industry was hit particularly hard after the 9/11 attacks on the World Trade Center in 2001. In 2002, Southwest Airlines, one of the healthier airlines companies, made a decision to...
-
Gent Manufacturing Company purchased a robot for $720,000 at the beginning of year 1. The robot has an estimated useful life of four years and an estimated residual value of $60,000. The robot, which...
Study smarter with the SolutionInn App