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The common stock of Perforated Pool Liners, Incorporated now sells for $44.00 per share. The table below shows the anticipated stock price and the dividend
The common stock of Perforated Pool Liners, Incorporated now sells for $44.00 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. 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.) b. What is the expected return for a holder of Perforated Pool Liners stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the standard deviation of the returns? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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