1.1 Delta Corporation is public company registered on the New York Stock (NYS) exchange. Delta's stock...

Transcribed Image Text:

1.1 Delta Corporation is public company registered on the New York Stock (NYS) exchange. Delta's stock is currently trading for R30 a share. The company's expected dividend payout and the end-of-year price depend on the state of the economy by the end of the year is shown in Table 1.1 as follows: The State of the Economy Boom Normal Recession Depression Table 1.1 Required: 1.1.1 1.1.2 Stock price R40 R33 R24 R12 Dividend per share R2.50 R1.50 R0.75 Calculate the expected Holding Period Return (HPR). (3 Marks) Compute the Standard deviation of the HPR. All four states of the economy are (5 Marks) equally likely 1.1 Delta Corporation is public company registered on the New York Stock (NYS) exchange. Delta's stock is currently trading for R30 a share. The company's expected dividend payout and the end-of-year price depend on the state of the economy by the end of the year is shown in Table 1.1 as follows: The State of the Economy Boom Normal Recession Depression Table 1.1 Required: 1.1.1 1.1.2 Stock price R40 R33 R24 R12 Dividend per share R2.50 R1.50 R0.75 Calculate the expected Holding Period Return (HPR). (3 Marks) Compute the Standard deviation of the HPR. All four states of the economy are (5 Marks) equally likely

Answer rating: 100% (QA)

111 Assuming that the investor holds the stock for one year the expected holding period ... View the full answer