The average dividend yield for S&P 500. Introduction: Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

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Answer 1

Question

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

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Using the table is there any relationship between the CFPS, EPS and DPS? Using the table is there any correlation between dividends and cash flow? Using the table is there any correlation between dividends and earnings? YEARS DIVIDENDS PER SHARE EARNINGS PER SHARES DIVIDENDS PAYOUT RATIO CASH FLOW PER SHARE CASH FLOW PAYOUT RATIO 2011 0.000 0.54 0.00 0.271 0.00 2012 0.000 0.46 0.00 0.491 0.00 2013 0.003 0.49 0.01 0.434 0.01 2014 0.000 0.33 0.00 1.298 0.00 2015 0.088 0.15 0.60 2.311 0.04 2016 0.051 0.05 0.98 2.966 0.02 2017 0.050 0.08 6.77 1.136 0.04 2018 0.000 0.84 0.00 -0.701 0.00 2019 0.098 1.09 0.09 -0.722 -0.14 2020 0.190 0.49 0.39 -0.427 -0.44

Please, 1. Calculate the average stock return from 2005–2007, the standard deviation and coefficient of variation over this period. The market price of the stock was $31 at year-end 2004, $35 at year-end 2005, $42 at year-end 2006, and $55 at year-end 2007. For valuation purposes, industry experts use the dividend valuation model to value the common equity interest of industry firms. Potential investors’ required rate of return for this firm is 14 percent; growth rate is 13 percent for 2010 and 2011, and then declines to 12 percent for all later years. Market Returns: The stock returns for the market as a whole were as follows: 15.7 percent in 2005, 8.2 percent in 2006, and 12.1 percent in 2007

As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and gL = 8.00% (constant). Based on the dividend growth model, what is the cost of common from reinvested earnings? 10.69% 11.25% 11.84% 12.43% 13.05%

Answer 2

Question

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Expert Solution & Answer

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Answer 3

Question

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Expert Solution & Answer

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See solution

Answer 5

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Answer 6

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

Answer 7

Chapter 10, Problem 10P

a)

Summary Introduction

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

Answer 8

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

Answer 9

b)

Summary Introduction

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

Answer 10

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

Answer 11

c)

Summary Introduction

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

Answer 12

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Answer 13

d)

Summary Introduction

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Answer 14

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Answer 15

e)

Summary Introduction

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

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The average dividend yield for S&P 500. Introduction: Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

Solution Summary: The author explains how to calculate the average dividend yield for the S&P 500.

Concept explainers

Videos

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Want to see the full answer?

Chapter 10 Solutions

The average dividend yield for S&amp;P 500. Introduction: Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

Solution Summary: The author explains how to calculate the average dividend yield for the S&P 500.

Concept explainers

Videos

To determine: The average dividend yield for S&P 500. Introduction: Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

To determine: The volatility of the dividend yield. Introduction: Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

To determine: The average annual return of the S&P500 of 2002 to 2014. Introduction: Average annaul return refers to the returns that an investment earns in an average year over different periods.

To determine: The volatility of the S&P500 returns from capital gains. Introduction: Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period. Introduction: Capital gains yield is a ratio that indicates the rise in the price of the common stock.

Want to see the full answer?

Chapter 10 Solutions

The average dividend yield for S&P 500. Introduction: Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

To determine: The average dividend yield for S&P 500.

Introduction:

Dividend yield is a ratio that specifies how much a company pays as dividends every year, on comparing with its share price. It is considered as the return on the investment for a stock.

To determine: The volatility of the dividend yield.

Introduction:

Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings.

To determine: The average annual return of the S&P500 of 2002 to 2014.

Introduction:

Average annaul return refers to the returns that an investment earns in an average year over different periods.

To determine: The volatility of the S&P500 returns from capital gains.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

To discuss: The capital gains or dividends are most important components of the average returns of S&P500 in the period.

Introduction:

Capital gains yield is a ratio that indicates the rise in the price of the common stock.