(Adjusting prices to dividends) Here are stock price and dividend data for Kellogg Co.:

a. Calculate the dividend-adjusted returns for each of the years, their mean, and their standard deviation.

b. Stock analysts like to talk about the dividend yield—the dividend divided into the stock price. Compute the annual dividend yield for Kellogg, defined as Dividends over the year Average stock price during the year , and compute its statistics (mean and standard deviation) over the period.

c. If you bought Kellogg stock and had no intention of ever selling it, why might you be interested in the stock’s dividend yield?

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A 1 B KELLOGG PRICE AND DIVIDEND DATA Price at beginning E Price at Average price Dividend 23456 Year of year year end during the year during year 1999 34.12 30.81 32.47 0.99 2000 30.81 26.25 28.53 1.00 2001 26.25 30.10 28.18 1.10 2002 30.10 34.27 32.19 1.01 7 2003 34.27 38.08 36.18 1.01 8 2004 38.08 44.66 41.37 1.01 9 2005 44.66 43.22 43.94 1.06 10 2006 43.22 50.06 46.64 1.14 11 2007 50.06 52.43 51.25 1.20 12 2008 52.43 43.85 48.14 1.30 13 2009 43.85 53.20 48.53 1.43 14 2010 53.20 51.08 52.14 1.56 15 2011 51.08 50.57 50.83 1.67 16 2012 50.57 55.85 53.21 1.74 17 2013 55.85 61.07 58.46 1.80 18 2014 61.07 64.94 63.01 1.90