Question 4 (20 marks): Part A The stock price for Coin Co. has been volatile over the last few years. The company pays no dividends. Below is the closing price for the last trading day of December for each of the listed years: 2016 2015 2014 2013 2012 2011 Coin Co. stock price as at December 31 $87.34 $104.81 $70.86 $158.75 $113.83 $54.50 1. Calculate the Total Holding Period Return(HPR) for the 5-year period, 31 December 2011 to December 31, 2016. (3 marks) 2. Calculate the geometric average annual return for the 5 years ending 2016. (3 marks) 3. Calculate the arithmetic average return for the 5 years ending 2016. (4 marks) 4. If I want to know what annual return I earned on average on my Coin Co, investment, I would calculate the average return. If I want to know what return I can expect to earn in any given year on Coin Co., I would use the _average return. (2 marks) Question 4: (continued) Part B You have been asked to calculate a Coin Co.'s weighted average cost of capital (WACC). Coin Co. has 10 million shares outstanding, trading at a price of $10 each. The company has outstanding debt with a face value of $50 million. These are all 20 year bonds with a 7% coupon, and a yield to maturity of 4%. The yield on a risk free T-bill is 3%, the market return is 12% and Coin Co.'s beta is 0.9. Ignore taxes. What is Coin Co.'s weighted average cost of capital (WACC)? (Use CAPM for cost of equity) (8 marks)