Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The attached file contains hypothetical data for working this problem. Goodman Corporations and Landry Incorporateds stock prices and dividends, along with the Market Index, are

The attached file contains hypothetical data for working this problem. Goodman Corporations and Landry Incorporateds stock prices and dividends, along with the Market Index, are shown in the file. 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.

a. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average returns over the five-year period. (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 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 2015 because you do not have 2014 data.)
Data as given in the problem are shown below:
Goodman Industries Landry Incorporated Market Index
Year Stock Price Dividend Stock Price Dividend Includes Divs.
2020 $30.32 $2.23 $85.12 $3.52 18,475.97
2019 $23.53 $2.65 $79.32 $3.65 12,174.55
2018 $28.61 $2.73 $74.32 $3.45 12,019.97
2017 $15.21 $2.57 $87.12 $3.47 10,743.05
2016 $12.63 $2.23 $95.12 $3.55 9,455.42
2015 $13.21 $2.25 $84.25 $3.25 8,163.96
We now calculate the rates of return for the two companies and the index:
Goodman Landry Index
2020
2019
2018
2017
2016
Average
Note: To get the average, you could get the column sum and divide by 5, but you could also use the function wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for Goodman and then copy the cell for the other items.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Modeling

Authors: Simon Benninga, Tal Mofkadi

5th Edition

0262046423, 9780253337825

More Books

Students also viewed these Finance questions

Question

How flying airoplane?

Answered: 1 week ago