Question
Use the following data to answer all 8 of the questions. Important note regarding number formatting when you input your answers: For any answers requiring
Use the following data to answer all 8 of the questions.
Important note regarding number formatting when you input your answers:
For any answers requiring an answer in dollars, input your answer to 2 decimal places (i.e. 12.34) - do not include $ signs in your submitted answer.
For any answers requiring an answer in percentage format, input your answer to 1 decimal place (i.e. 12.3) - do not include % signs in your submitted answer
For any answers requiring an answer in numerical format, input your answer to 1 decimal place (i.e. 1.2)
Data required to solve this extra credit opportunity:
FIN340 Company Historical Stock Price & Dividend Performance | |||
Actual Stock Performance: | |||
Stock Price as of | |||
Jan. 1 | Dec. 31 | Annual Dividend Paid | |
2016 | $48.00 | $50.40 | $3.50 |
2017 | $50.40 | $45.36 | $3.50 |
2018 | $45.36 | $45.81 | $3.50 |
2019 | $45.81 | $57.26 | $3.70 |
2020 | $57.26 | $54.40 | $3.70 |
Key Assumptions: | |||
Estimated Future Annual Growth Rate (i.e. Constant Growth Rate): | 5.0% | ||
10-Year Treasury Bond Rate = | 1.34% | ||
10-Year Market Return Benchmark = | 9.50% | ||
FIN340 Company Beta = | 1.25 |
1.What is the average annual percentage return generated by the FIN340 Company between 2016 - 2020 (include dividends in your calculation)?
2. What was the geometric mean return generated by the FN340 company stock between January 1, 2016 - December 31, 2020. Calculate this specific calculation only using stock prices (ignore annual dividends paid).
3. Calculate the standard deviation (i.e. volatility/risk) based on the FIN340 company's stock performance between 2016 - 2020 (include dividends in your calculation)?
4. Based on the average annual return and risk (standard deviation) calculated previously, what was the FIN340 Company's Coefficient of Variation during the 2016 - 2020 timeframe?
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