Question
Given the following information about Stock A: P0 = $39.50 D1 = $3.25 paid at end of year D2 = $3.25 paid at end of
Given the following information about Stock A:
P0 = $39.50 D1 = $3.25 paid at end of year D2 = $3.25 paid at end of year Suppose that you can invest D1 at an annual rate of 5% over the second year and after collecting dividend D2 you sell the stock for $41.75 at the end of year 2.
a. What is your holding period return for the two years?
b. What is the geometric mean annual return?
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
7th Edition
0030333288, 9780030333286
