Question
The following table provides prices and dividends paid for one share of Able Corporation. Assume that 1000 shares are purchased on 01/01/2008. Assume also that
The following table provides prices and dividends paid for one share of Able Corporation. Assume that 1000 shares are purchased on 01/01/2008. Assume also that all dividends received are reinvested into new shares. Find the annual geometric return over the three-year period. Show all workings.
Date | Able Share Price | Dividends Per Share |
1/01/2008 | 11.40 | 0.40 |
31/12/2008 | 12.64 | 0.42 |
31/12/2009 | 10.22 | 0.45 |
31/12/2010 | 12.88 | 0.50 |
The first dividend cant be used as we are not going to receive it and hence reinvestment will start from the second dividend.
GAR= 8.18% This is the answer, but I dont know how to get it.
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