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The common stock of Perforated Pool Liners, Incorporated now sells for $53.00 per share. The table below shows the anticipated stock price and the dividend
The common stock of Perforated Pool Liners, Incorporated now sells for $53.00 per share. The table below shows the anticipated stock price and the dividend to be paid one year from now. Both the price and the dividend will depend on the level of growth experienced by the firm. State Probability, p(s) End-of-Year Price Annual Dividend Super high growth 0.100 $ 65 $3 High growth $ 48 Normal growth 0.395 $ 56 Low growth 0.165 $ 2 No growth @.190 $ 3 $ 2 $45 $ 46 @.150 $ Required: a. Calculate the holding period return (HPR) for each of the possible states, assuming a one-year holding period. (Use a negative sign to Indicate a negative answer. Round your answer to 2 decimal places.) State HPR % Super high growth High growth Normal growth Low growth No growth 96 96 % 9 96 b. What is the expected return for a holder of your answer to 2 decimal places.) Liners stock? (Do not round Intermediate calculations. Round Expected HPR % c. What is the standard deviation of the returns? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Standard deviation 96
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