Question

A stock has had the following year-end prices and dividends: Year Price Dividend 0 $ 43.29...

A stock has had the following year-end prices and dividends:

Year Price Dividend

0 $ 43.29 -

1 48.27 $ .48

2 57.19 .51

3 45.27 .60

4 52.19 .65

5 61.27 .73

What are the arithmetic and geometric average returns for the stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Arithmetic average return ? %

Geometric average return ?%

Homework Answers

Answer #1
Year Stock Price Dividend Aritmetic Average Return Geometric Average Return
0 $     43.29 $         -  
1 $     48.27 $    0.48 12.61% 1.13
2 $     57.19 $    0.51 19.54% 1.20
3 $     45.27 $    0.60 -19.79% 0.80
4 $     52.19 $    0.65 16.72% 1.17
5 $     61.27 $    0.73 18.80% 1.19
9.57% 8.41%

Arithmetic Average Return = 9.57%

Geometric Average Return = 8.41%

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