1) John made the following investments in Stock A. Calculate his money-weighted return earned over the 5-year period. The cost of equity for Stock A is 10% p.a.Balance from previous yearNew investment by investorNet balance at beginning of yearInvestment return for the yearInvestment gains or (loss)Withdrawal by investorBalance at end of year10100100-50%-50050250950100035%350-3501000310000100027%2700127041270230150010%150-1501500515000150020%300-18000

Money weighted return is basically internal rate of return (IRR) for the given series of cash flows.…

Answered: revious year t by investor beginning of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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John made the following investments in Stock A. Calculate his money-weighted return earned over the 5-year period. The cost of equity for Stock A is 10% p.a. 1 2 3 4 5 Balance from previous year 0 50 1000 1270 1500 New investment by investor 100 950 0 230 0 Net balance at beginning of year 100 1000 1000 1500 1500 Investment return for the year -50% 35% 27% 10% 20% Investment gains or (loss) -50 350 270 150 300 Withdrawal by investor 0 -350 0 -150 -1800 Balance at end of year 50 1000 1270 1500 0
Using the data from the following table,calculate the return for investing in this stock from January 1 to December 31. Prices are after the dividend has been paid. Stock Price Dividend Jan 1 $50.18 Mar 31 $51.11 $0.58 Jun 30 $49.56 $0.58 Sep 30 $51.93 $0.75 Dec 31 $52.53 $0.75 The return from January 1 to March 31 is enter your response here. (Round to five decimal places.) Part 2 The return from March 31 to June 30 is enter your response here. (Round to five decimal places.) Part 3 The return from June 30 to September 30 is enter your response here. (Round to five decimal places.) Part 4 The return from September 30 to December 31 is enter your response here. (Round to five decimal places.) Part 5 enter your response here%. (Round to two decimal places.)
Calculating Return Components An investor purchases one share of stock for $50. After one year, they sell the share for $55. During the year, they receive $7 in dividends. a) What was the dividend yield, in percentage terms? b) What was the capital gain from price appreciation on the stock, in percentage terms? c) What was the total return in dollars? What was the total return, in percentage terms?
a. Define the equity method b. Use the following example to describe the equity method Presume that Company A bought 30% of Company B’s outstanding common stocks at $400,000 (cash) on 01/01/2020 During 2020, Company B earned net income of $200,000 and paid dividends of $40,000 Provide the journal entries for this equity investment in fiscal year 2020 What is the balance for this equity investment on 12/31/2020? Explain why the accounting numbers obtained using the equity method are misleading
8.An investor purchased 100 shares of common stock at GH¢20 per share one year ago. The company declared and paid a dividend of GH¢2 per share during the year. The investor sold the stock for GH¢21 per share after the one-year holding period. a.Calculate the HPR for this investment Partition the HPR into dividend return and capital appreciation return .
At the beginning of the year, you purchased a stock for $35. Over the year the dividends paid on the stock $2.75 per share. a. Calculate the return if the price of the stock at the end of the year is $30 b. Calculate the return if the price of the stock at the end of the year is $40
An investor purchased a stock one year ago for $43.00. It paid an annual cash dividend of $3.37 and is now worth $50.61. What total return did the investor earn? Would the investor have experienced a capital gain? The investor would experience a capital gain in the amount of $?. Round to nearest cent The total return earned by the investor is $?
The common stock of Placo Enterprises had a market price of $ 9.11 on the day you purchased it just one year ago. During the past year the stock had paid a dividend of $ 1.16 and closed at a price of $ 10.42. What rate of return did you earn on your investment in Placo's stock? Question content area bottom Part 1 The rate of return you earned on your investment in Placo's stock is enter your response here %. (Round to two decimal places.)
You purchased a stock at a price of $70.72. The stock paid a dividend of $2.03 per share and the stock price at the end of the year is $63.02. What are your capital gains on this investment?
Find the realized return that you would earn if you purchased a stock originally for $43, sold it for $42, and during the year received a dividend of $3.
I bought ANF stock on 8/14/2018 for $29.26 and then collected $0.20 dividends on 09/06/2018 and then sold my stock on 11/30/2018 for $20.91. What has been my annualized return from this transaction? (Please use IRR) -67.07% -45.20% +3.25% -78.45%
K Using the data in the following table, calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock immediately. The realized return from January 2, 2008, to January 2, 2009 is%. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Historical Stock and Dividend Data for Boeing Dividend Date 1/3/2011 2/9/2011 5/11/2011 8/10/2011 11/8/2011 1/3/2012 Date 1/2/2008 2/6/2008 5/7/2008 8/6/2008 11/5/2008 1/2/2009 " Price $85.61 $79.69 $84.49 $66.96 $48.59 $45.42 $0.38 $0.38 $0.38 $0.00 Print Done Price $66.37 $71.74 $79.99 $56.99 $64.03 $75.65 Dividend $0.44 $0.44 $0.44 $0.44

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revious year t by investor beginning of year urn for the year s or (loss) investor of year 1 0 100 100 -50% -50 0 50 2 50 950 1000 35% 350 -350 1000 3 1000 0 1000 27% 270 0 1270 4 1270 230 1500 10% 150 -150 1500 5 1500 0 1500 20% 300 -1800 0