Return on Equity: Return on Equity is the rate of return earned by the Stockholders on their investment in the company. It is calculated with the help of following formula: Re t u r n o n E q u i t y = N e t I n c o m e A v e r a g e S t o c k h o l d e r ’ s E q u i t y The Average stock holder's equity calculated with the help of following formula: A v e r a g e s t o c k h o l d e r ’ s e q u i t y = ( B e g i n n i n g s t o c k h o l d e r ’ s e q u i t y + E n d i n g s t o c k h o l d e r ’ s e q u i t y ) 2 To Calculate: The Return on Stockholder's equity

Question

Using the data in the following table, Date Jan 1 Feb 5 " Calculate the returns for each subperiod below: (Round to five decimal places. Enter dividend yield and capital gain yield as decimal numbers.) Capital Gain Yield Price 33.88 30.67 $ calculate the dividend yield and the capital gain yield from investing in the stock from January 1 to December 31. Dividend Dividend Yield 0.17 Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Stock and Dividend Data Price $33.88 $30.67 $29.49 $32.38 $39.07 $41.99 Date Jan 1 Feb 5 May 14 Aug 13 Nov 12 Dec 31 Print Done Dividend $0.17 $0.17 $0.17 $0.17 X

Answer 1

Question

Chapter 15, Problem 15.2.2MBA

To determine

Concept Introduction:

Return on Equity:

Return on Equity is the rate of return earned by the Stockholders on their investment in the company. It is calculated with the help of following formula:

Return on Equity = Net IncomeAverage Stockholder’s Equity

The Average stock holder's equity calculated with the help of following formula:

Average stock holder’s equity=( Beginning stock holder’s equity + Ending stock holder’s equity)2

To Calculate:

The Return on Stockholder's equity

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