Question
A stock has the following prices and dividends. What is the annual return on this stock over the course of the first year, the second
A stock has the following prices and dividends. What is the annual return on this stock over the course of the first year, the second year, and the third year? (Need three separate numbers, one for each year. Hint: remember that the total return equals to the sum of (1) capital gains and (2) dividend yield.) What is the annual arithmetic average return over the three years? How about the annual geometric average return? What is the projected annual return on this stock for the following two years according to Blumes formula? Year 0 1 2 3 Price ($) 16.40 16.10 15.48 9.15 Dividend ($) 0.50 0.50 0.75
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