Question

6.1. What is the price of Woodlands stock on March 23, 2017? [2]

6.2. What is the price of Woodlands stock on March 23, 2018? [2]

6.3. Calculate the percentage change in price of Woodlands stock from March 23, 2017, to March 23, 2018. [2]

6.4. For an investor who bought Woodlands stock on March 23, 2017, received a dividend on March 22, 2018, and sold the stock on March 23, 2018, what was the total rate of return on the investment? How much of this return came from the dividend, and how much came from the capital gain? [4] 6.5. What is the price of Woodlands stock on March 23, 2021? [3]

6.6. What is the price of Woodlands stock on March 23, 2022? [3]

6.7. For an investor who bought Woodlands stock on March 23, 2021, received a dividend on March 22, 2022, and sold the stock on March 23, 2022, what was the total rate of return on the investment? How much of this return came from the dividend, and how much came the capital gains? Comment on the differences between your answers to this question and your answers in part (6.4). [4]

Answer 1

1- Woodlands Financial Services Company (WDFN)

Yahoo Finance -Woodlands Financial Services Company (WDFN) - Historical Data.

1- Stock Price on March 23, 2017 =30.6059

2- Stock on March 23, 2018 = 30.6477

3- Cahnge in Price = (30.6477 - 30.6059) / 30.6059 = 0.1366%

4- Dividend History:

Suppose dividends of 08-Feb-2018 is received a dividend on March 22, 2018

Total Return = ((30.6477 +0.23) - 30.6059) / 30.6059 = 0.888%

5- Returns from Diividends = 0.888 - 0.1366 = 0.7514%

Majority if the return is driven by dividends. Stocks Beta 0 and have the same expected return as of risk free treasury bond. Moreover, and is not liquid volumes are less as such capital gain is not playing role in the stock total return.