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I'm having trouble understanding the equations, could you show your work so I can have a better understanding. XYZ stock price and dividend history are
I'm having trouble understanding the equations, could you show your work so I can have a better understanding.
XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Year- Year Price End 2015 $106 $ 5 2016 101 5 2017 89 5 2018 94 5 An investor buys three shares of XYZ at the beginning of 2015, buys another two shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all four remaining shares at the beginning of 2018. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) % Arithmetic mean Geometric mean % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018. (Negative amounts should be indicated by a minus sign.) Cash Flow Date 01/01/2015 01/01/2016 01/01/2017 01/01/2018 b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.) Rate of return %Step by Step Solution
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