Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Question
Chapter 10, Problem 6P
Summary Introduction
To determine: The return from January 2, 2008 to January 2, 2009 and return from January 3, 2011 to January 3, 2012.
Introduction:
Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.
Stock is a type of security in a company which denotes ownership. On issuing stocks, the company can raise capital.
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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.
Using the data in the following table,
immediately.
9
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
The realized return from January 2, 2008, to January 2, 2009 is
Data table
%. (Round to two decimal places.)
(Click on the following icon in order to copy its contents into a spreadsheet.)
Dividend
Historical Stock and Dividend Data for Boeing
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
$87.75
$79.76
$85.01
$66.77
$47.75
$44.02
$0.37
$0.37
$0.37
$0.00
Print
Done
Price
$67.58
$70.28
$80.89
$56.25
$64.88
$74.91
Dividend
$0.41
$0.41
$0.41
$0.41
I
X
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.
Historical Stock and Dividend Data for Boeing
Date Price Dividend Date Price Dividend
1/2/2008 86.62 1/3/2011 66.40
2/6/2008 79.91 0.40 2/9/2011 72.63 0.42
5/7/2008 84.55 0.40 5/11/2011 79.08 0.42
8/6/2008 65.40 0.40 8/10/2011 57.41 0.42
11/5/2008 49.55 0.40 11/8/2011 66.65 0.42
1/2/2009 45.25 1/3/2012 74.22
Chapter 10 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 10.1 - For an investment horizon from 1926 to 2012, which...Ch. 10.1 - For an investment horizon of just one year, which...Ch. 10.2 - Prob. 1CCCh. 10.2 - Prob. 2CCCh. 10.3 - How do we estimate the average annual return of an...Ch. 10.3 - Prob. 2CCCh. 10.4 - Prob. 1CCCh. 10.4 - Do expected returns of well-diversified large...Ch. 10.4 - Do expected returns for Individual stocks appear...Ch. 10.5 - What is the difference between common risk and...
Ch. 10.5 - Prob. 2CCCh. 10.6 - Explain why the risk premium of diversifiable risk...Ch. 10.6 - Why is the risk premium of a security determined...Ch. 10.7 - What is the market portfolio?Ch. 10.7 - Define the beta of a security.Ch. 10.8 - Prob. 1CCCh. 10.8 - Prob. 2CCCh. 10 - The figure on page informalfigure shows the...Ch. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - The last four years of returns for a stock are as...Ch. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - How does the relationship between the average...Ch. 10 - Consider two local banks. Bank A has 100 loans...Ch. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Consider an economy with two types of firms, S and...Ch. 10 - Prob. 24PCh. 10 - Explain why the risk premium of a stock does not...Ch. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - What is an efficient portfolio?Ch. 10 - What does the beta of a stock measure?Ch. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - Suppose the risk-free interest rate is 4%. a. i....Ch. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Suppose the market risk premium is 6.5% and the...Ch. 10 - Prob. 38P
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