Problem 12-16 Arithmetic and Geometric Returns [LO1] A stock has had the following year-end prices and dividends: Year Price Dividend $ 1 43.27 2 48.25 $.45 3 57.17 48 4 45.25 .60 5 52.17 .65 6 61.25 .73 What are the arithmetic and geometric average returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average return 9.56% Geometric average return ୫୧ %

Problem 12-16 Arithmetic and Geometric Returns [LO1] A stock has had the following year-end prices and dividends: Year Price Dividend $ 1 43.27 2 48.25 $.45 3 57.17 48 4 45.25 .60 5 52.17 .65 6 61.25 .73 What are the arithmetic and geometric average returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average return 9.56% Geometric average return ୫୧ %

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 22SP

See similar textbooks

Similar questions

Problem 10-20 Arithmetic and Geometric Returns A stock has had returns of 12 percent, 30 percent, 17 percent, −18 percent, 30 percent, and −7 percent over the last six years. What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Arithmetic and Geometric Returns (LO1) A stock has had returns of 9%,21%,32%,-18%,27%, and -12% over the last six years. What are the arithmetic and geometric returns for the stock?
Problem 7-10Preferred Stock Rate of Return What is the required rate of return on a preferred stock with a $50 par value, a stated annual dividend of 12% of par, and a current market price of (a) $52, (b) $85, (c) $104, and (d) $136 (assume the market is in equilibrium with the required return equal to the expected return)? Round the answers to two decimal places.
Kk.113. what is the expected price per share in 4 years? last dividend per share $4, dividend growth rate 3%, beta for the stock 1.15, risk free rate 5%, market risk premium 8%
D3) An analyst gathers the following data: · Expected rate of return on the market = 14% · Current Dividend = $2 · Growth rate in dividends = 6% per year · Risk Free Rate = 8% · Expected rate of return on stock X if you buy at current price = 16% · Stock X’s beta = 1.25 Using this data, is this stock underpriced or overpriced and by how much (in % return).
Question one Suppose you have the following information from Muscat stock market Stock Share outstanding Base day Closing price Second day closing price Salalah company 18 3 2.8 Dhofar power company 26 2.8 3.1 Oman company 10 4.1 2.1 Dhofar bank 28 3 1.8 Calculate 1. Price weighted index 2. Value weighted index plz use the formula shows in the pictures
3. a. Suppose a stock pays currently pays a $10 dividend each year and that the dividend is expected to grow at 3% each year. Suppose that the risk-adjusted discount rate for that stock is 8%. According to fundamental analysis stock prices are the present value of expected future dividends (discounted at the risk-adjusted discount rate). What should the current price of this stock be? Hint: a=(1+g)/(1+i) where g is the growth rate in dividends and i is the discount rate for stocks. Use the formula in 2. but let ?? → ∞. b. For the stock in part a, what is the expected rate of return for that stock. c. Suppose that market participants think the stock has become riskier and raise the discount rate for the stock to 10%. What is the new stock price value? What is the expected rate of return for this stock?