Goodman Industries Year Stock Price Dividend 2013 $25.88 $1.73

Landry Incorporated Stock Price Dividend

$73.13 $4.50 78.45 4.35 73.13 4.13

85.88 3.75 90.00 3.38 83.63 3.00

Market Index Includes Dividends

17495.97 13178.55 13019.97

9651.05 8403.42 7058.96

2012 22.13 2011 24.75 2010 16.13 2009 17.06 2008 11.44

1.59 1.50 1.43 1.35 1.28

FIN 534 Homework Set #3

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points.

Use the following information for questions 1 through 4:

The Goodman Industries and Landry Incorporateds stock prices and dividends, along with the Market Index, are shown below. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends.

Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average annual returns for the two stocks and the index. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and then dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2008 because you do not have 2007 data.)