XYZ stock price and dividend history are as follows:Dividend Paid atYear-End5.5Year2010201920202021Beginning-of-Year PriceAn investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at thebeginning of 2020, and sells all eight remaining shares at the beginning of 2021.$130144120125Required:a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediatecalculations. Round your answers to 2 decimal places.)Arithmetic Sime-weighted average retumsGeometric time-weighted average returnsDate01/01/201801/01/201901/01/202001/01/2021b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021.(Negative amounts should be indicated by a minus sign.)Fale of retur%%Cash Flowb-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will hay to use aspreadsheet or trial and error) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

Rate of return (RoR) is a measure of the profitability or performance of an investment over a…

XYZ stock price and dividend history are as follows: Dividend Paid at Year-End 5.5 Year 2010 2019 2020 2021 Beginning-of- Year Price 130 144 120 125 An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic Simo-weighted average retums Geometric time-weighted average returns Date 01/01/2016 01/01/2019 01/01/2020 01/01/2021 b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) % % Cash Flow b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will hay to use a spreadsheet or trial and error) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

XYZ stock price and dividend history are as follows: Dividend Paid at Year-End 5.5 Year 2010 2019 2020 2021 Beginning-of- Year Price 130 144 120 125 An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic Simo-weighted average retums Geometric time-weighted average returns Date 01/01/2016 01/01/2019 01/01/2020 01/01/2021 b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) % % Cash Flow b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will hay to use a spreadsheet or trial and error) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 3E

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XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2019 $ 180 $ 4 2020 200 4 2021 170 4 2022 180 4 An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells one share at the beginning of 2021, and sells all four remaining shares at the beginning of 2022. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) b. What is the dollar-weighted rate of return? (Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2019, to January 1, 2022. (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.)
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