These two answers were both incorrect. Suppose that you are given the following information about the stock
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These two answers were both incorrect.
Suppose that you are given the following information about the stock price/dividends for a company: Year 2016 2017 2018 2019 Beginning of Year Price $80 $85 $78 $82 Dividend Paid at Year-End $3 $ 4 $2 $ 2 If the company's stock price is $85 per share at the end of 2019, what is the arithmetic average return for an investment in XYZ over the period? What is the geometric average return for an investment in XYZ over the period? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic mean Geometric mean Show transcribed image text Expert Answer Dinvahi answered this 7,374 answers Was this answer helpful? 0 1 D E B Price 1 Year Dividend Return 2 3 3 4 2016 $ 2017 $ 2018 $ 20190 $ 80 $ 85$ 78 $ 82 $ 4 2 11.25% =(B3-B2+C3)/B2 -5.88% =(B4-B3+C4)/B3 7.69% =(B5-B4+C5)/B4 5 2 6 7 Total = 13.06% 8 9 Arithmetic return 4.35% =D7/3 10 11 Geometric return 4.08% =((1+D3)*(1+04)*(1+05))^(1/3)-1
Related Book For
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
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