Choose an established local (or nearby) company whose stock is listed and actively traded on a major exchange. Find the stock’s closing price at the end of each of the preceding six years and the amount of dividends paid in each of the preceding five years. Also, obtain the value of the Dow Jones Industrial Average at the end of each of the preceding six years.
a. Use Equation 13.1 to calculate the pretax holding period return on the stock for each of the preceding five years.

b. Study the international, national, and local economic and market developments that occurred during the preceding five years.
c. Compare the stock’s returns with the DJIA for each year over the five-year period of concern.
d. Discuss the stock’s returns in light of the economic and market developments noted in part b and the behavior of the DJIA as noted in part c over the five preceding years. How well did the stock perform in light of these factors?

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Holding period return = Current income during period + Capital gain (or loss) during period Beginning investment value