Consider the three stocks in the following table. Pt represents price at time t, and Ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. Pe 00 P1 01 P2 02 91 100 96 100 96 100 51 200 46 200 46 200 с 102 200 112 200 56 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index Rate of return % b. An equally weighted index Rate of return ABC %

Consider the three stocks in the following table. Pt represents price at time t, and Ot represents shares outstanding at time t. Stock C splits two-for-one in the last period. Pe 00 P1 01 P2 02 91 100 96 100 96 100 51 200 46 200 46 200 с 102 200 112 200 56 400 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index Rate of return % b. An equally weighted index Rate of return ABC %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 7P

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An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?
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