Question
XYZ stock price and dividend history are as below. Year Share price at the beginning of the year ($) Dividend paid at the end of
XYZ stock price and dividend history are as below.
Year | Share price at the beginning of the year ($) | Dividend paid at the end of the year ($) |
2014 | 70 | 3 |
2015 | 68 | 4 |
2016 | 70 | 2 |
2017 | 65 | 2 |
2018 | 67 | 5 |
An investor buys three shares of XYZ at the beginning of 2014, buys another two shares at the beginning of 2015, sells two shares at the beginning of 2016, buys two shares at the beginning of 2017 and sells all remaining shares at the beginning of 2018. Using the above information calculate the following for the investor
a. Dollar-weighted rate of return
Dollar-weighted return (DWR)
Enter the cash flows for each period in a column in an Excel sheet and use the IRR function to calculate the DWR. Example, if you have cash flows in cells A1,A2,A3 and A4, DWR can be calculated as follows:
=IRR(A1,A2,A3, A4)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started