MyLab Finance with Pearson eText -- Access Card -- for Corporate Finance (Myfinancelab)
4th Edition
ISBN: 9780134099170
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Question
Chapter 10, Problem 6P
Summary Introduction
To determine: The return from January 2, 2008 to January 2, 2009 and return from January 3, 2011 to January 3, 2012.
Introduction:
Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.
Stock is a type of security in a company which denotes ownership. On issuing stocks, the company can raise capital.
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Using the data in the following table, calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock immediately.
Historical Stock and Dividend Data for Boeing
Date Price Dividend Date Price Dividend
1/2/2008 86.62 1/3/2011 66.40
2/6/2008 79.91 0.40 2/9/2011 72.63 0.42
5/7/2008 84.55 0.40 5/11/2011 79.08 0.42
8/6/2008 65.40 0.40 8/10/2011 57.41 0.42
11/5/2008 49.55 0.40 11/8/2011 66.65 0.42
1/2/2009 45.25 1/3/2012 74.22
The following table shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. Company Shares Beginning of Year Price Dividend Per Share End of Year Price US Bank 300 $ 44.60 $ 2.17 $ 44.53 PepsiCo 200 60.18 1.38 63.65 JDS Uniphase 500 19.98 17.76 Duke Energy 200 28.00 1.37 33.76 What is your portfolio dollar return and percentage return?
Using the data from the following table,calculate the return for investing in this stock from January 1 to December 31. Prices are after the dividend has been paid.
Stock Price
Dividend
Jan 1
$50.18
Mar 31
$51.11
$0.58
Jun 30
$49.56
$0.58
Sep 30
$51.93
$0.75
Dec 31
$52.53
$0.75
The return from January 1 to March 31 is
enter your response here.
(Round to five decimal places.)
Part 2
The return from March 31 to June 30 is
enter your response here.
(Round to five decimal places.)
Part 3
The return from June 30 to September 30 is
enter your response here.
(Round to five decimal places.)
Part 4
The return from September 30 to December 31 is
enter your response here.
(Round to five decimal places.)
Part 5
enter your response here%.
(Round to two decimal places.)
Chapter 10 Solutions
MyLab Finance with Pearson eText -- Access Card -- for Corporate Finance (Myfinancelab)
Ch. 10.1 - For an investment horizon from 1926 to 2012, which...Ch. 10.1 - For an investment horizon of just one year, which...Ch. 10.2 - Prob. 1CCCh. 10.2 - Prob. 2CCCh. 10.3 - How do we estimate the average annual return of an...Ch. 10.3 - Prob. 2CCCh. 10.4 - Prob. 1CCCh. 10.4 - Do expected returns of well-diversified large...Ch. 10.4 - Do expected returns for Individual stocks appear...Ch. 10.5 - What is the difference between common risk and...
Ch. 10.5 - Prob. 2CCCh. 10.6 - Explain why the risk premium of diversifiable risk...Ch. 10.6 - Why is the risk premium of a security determined...Ch. 10.7 - What is the market portfolio?Ch. 10.7 - Define the beta of a security.Ch. 10.8 - Prob. 1CCCh. 10.8 - Prob. 2CCCh. 10 - The figure on page informalfigure shows the...Ch. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - The last four years of returns for a stock are as...Ch. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - How does the relationship between the average...Ch. 10 - Consider two local banks. Bank A has 100 loans...Ch. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Consider an economy with two types of firms, S and...Ch. 10 - Prob. 24PCh. 10 - Explain why the risk premium of a stock does not...Ch. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - What is an efficient portfolio?Ch. 10 - What does the beta of a stock measure?Ch. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - Suppose the risk-free interest rate is 4%. a. i....Ch. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Suppose the market risk premium is 6.5% and the...Ch. 10 - Prob. 38P
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