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Your supervisor has requested that you consider Cronox Industries or Zealous Incorporated. For the period 2016 2021, the share prices and dividends of the two
Your supervisor has requested that you consider Cronox Industries or Zealous Incorporated. For the period 2016 2021, the share prices and dividends of the two companies, as well as the returns on the Ghana Stock Exchange, are shown below.
Cronox Industries | Zealous Incorporated | ||||
Year | Stock price | Dividend (GH) | Stock price | Dividend (GH) | GSE Returns (Market Returns) |
2016 | 7.62 | - | 55.75 | - | - |
2017 | 12 | 0.90 | 60.00 | 2.25 | 0.07 |
2018 | 10.75 | 0.95 | 57.25 | 2.50 | 0.12 |
2019 | 17 | 1.00 | 48.75 | 2.75 | 0.08 |
2020 | 15.75 | 1.06 | 52.30 | 2.90 | 0.23 |
2021 | 17.25 | 1.15 | 48.75 | 3.00 | 0.18 |
- Use the data given to calculate the annual returns for Cronox, and Zealous using 2016 as the base year.
- Compute the average returns (Arithmetic Average) for each of the stocks over the five-year period (2017-2021)
- Calculate the risk (standard deviation of returns) for both Cronox and Zealous.
- Calculate the coefficient of variation for both companies
- Compare the two companies regarding risk and returns and advise Kweku The Don on which one to invest in.
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