Question

Asked Nov 9, 2019

69 views

A stock has had the following year-end prices and dividends:

Year | Price | Dividend | |||||

0 | $ | 43.29 | - | ||||

1 | 48.27 | $ | .48 | ||||

2 | 57.19 | .51 | |||||

3 | 45.27 | .60 | |||||

4 | 52.19 | .65 | |||||

5 | 61.27 | .73 | |||||

What are the arithmetic and geometric average returns for the stock? **(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)**

Arithmetic average return | % |

Geometric average return | % |

Step 1

**Calculation of Arithmetic and Geometric Average Return:**

The arithmetic average return is **9.57%** and geometric average return is **8.41%**.

**Excel Spreadsheet:**

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: Lee Remick read the following partial advertisement: price, $22,500; down payment, $1000 cash or tra...

A: Price = $22,500Down Payment = $1,000Loan Amount (pv) = $22,500 - $1,000 = $21,500Monthly Installment...

Q: With blank voting, all directors up for election are vorted on by the share holders at the same time...

A: With cumulative voting, all directors up for election are voted on by the share holders at the same ...

Q: An investor has a portfolio of two securities, a stock with a beta of 1.24 and a risk-free asset. Th...

A: Suppose the weight of the stock in the portfolio be x, then the weight of the risk free asset in the...

Q: Thrice Corp. uses no debt. The weighted average cost of capital is 4.8 percent. If the current marke...

A: Earning before interest and taxes are calculated to determine the earnings of the company before tax...

Q: Suppose that a firm’s recent earnings per share and dividend per share are $2.60 and $1.60, respecti...

A: Calculate the dividend over the next five years as follows:

Q: need help

A: Under one factor model:E(R) = Rf + Beta x Z where E(R) = expected return of a security, Rf = risk fr...

Q: A company's capital structure is 40% debt and 60% equity. The interest cost on its debt is 10% and i...

A: Weighted average cost of capital can be used to estimate the rate which should be provided to invest...

Q: If you insulate your office for $19,000, you will save $1,900 a year in heating expenses. These savi...

A: a.Initial Investment = $19,000Saving in heating expense = $1,900 Calculation of NPV of the Investmen...

Q: For technical analysis, based on patterns of historical prices, to have value, ______ form of market...

A: Weak form efficiency market hypothesis is an element of efficient market hypothesis which states tha...