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Question 3 You are considering investing in DDC stock. Your broker reports to you the following information on retrospective returns Ri, and the stock price
Question 3 You are considering investing in DDC stock. Your broker reports to you the following information on retrospective returns Ri, and the stock price Pi. Year i 2017 2018 2019 2020 Ri 0.30 0.20 -0.10 0.15 Pi $2.20 $1.80 $2.08 $2.00 a) Indicate the appropriate formula, with the values included, to compute the standard deviation of these ex-post returns, and then calculate it (NOTE: You do not have to use the table method illustrated in the lectures). (2 marks) b) Using the dividend growth model, find was the dividend received in 2021? (2 marks) Question 3 You are considering investing in DDC stock. Your broker reports to you the following information on retrospective returns Ri, and the stock price Pi. Year i 2017 2018 2019 2020 Ri 0.30 0.20 -0.10 0.15 Pi $2.20 $1.80 $2.08 $2.00 a) Indicate the appropriate formula, with the values included, to compute the standard deviation of these ex-post returns, and then calculate it (NOTE: You do not have to use the table method illustrated in the lectures). (2 marks) b) Using the dividend growth model, find was the dividend received in 2021? (2 marks)
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