Blue Square's Stock price and dividend history are as follows: Year Beginning Year Price Dividend Paid the end of the year 2018 $100 $4 2019 $120 $4 2020 $90 $4 2021 $100 $4 An investor buys three shares of Blue Squareat the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020 and sells all four remaining shares at the beginning of 2021. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? 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, 2018, to January 1, 2021. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.)
Blue Square's Stock price and dividend history are as follows: Year Beginning Year Price Dividend Paid the end of the year 2018 $100 $4 2019 $120 $4 2020 $90 $4 2021 $100 $4 An investor buys three shares of Blue Squareat the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020 and sells all four remaining shares at the beginning of 2021. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? 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, 2018, to January 1, 2021. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 69E:
Stock Dividends
Crystal Corporation has the following information regarding its common stock: S10...
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