Question: Problem 11-7 Calculating Annual Shareholder Return and Annual Average Compound Return [LO3] Two years ago, you purchased 100 shares of a cola company. Your purchase

 Problem 11-7 Calculating Annual Shareholder Return and Annual Average Compound Return

Problem 11-7 Calculating Annual Shareholder Return and Annual Average Compound Return [LO3] Two years ago, you purchased 100 shares of a cola company. Your purchase price was $52 a share, plus a commission of $6 per share, for a total cost of $58 per share. After one year, the stock's market value had risen to $62. At the end of two years, you sold your cola company stocks for $70 a share, less a per-share commission of $3. During the two years you held the stock, you received dividends of $0.58 per share for the first year and $0.70 per share for the second year. a. Calculate your annual shareholder return for each of the two years you owned the stock. (Round your answers to 1 decimal place. Omit the "%" sign in your response.) Annual shareholder return Year 1 Year 2 b. Calculate your annual average compound return. (Round your intermediate calculations and final answer to 1 decimal place. Omit the "%" sign in your response.) Annual average compound return

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!