Question

An ABC Ltd share was selling for $8.01 two years ago. The share sold for $15.63...

An ABC Ltd share was selling for $8.01 two years ago. The share sold for $15.63 one year ago, and it is currently selling for $26.76. ABC Ltd pays a $0.76 dividend each year-end. What was the rate of return for owning ABC shares in the most recent year? (In percentages to two decimal places eg 2.881% is 2.88; don’t use % sign)

Homework Answers

Answer #1

Given,

Price of share two years ago = $8.01

Price of share one year ago = $15.63

Price of share currently selling = $26.76

Dividend paid every year = $0.76

Computation of rate of return for owning ABC Ltd shares in the most recent year

In the most recent year implies owing share in the just completed year.

Rate of return = [Price of share in current year - Price of share an year ago + Dividend]/Price of share an year ago

= [P1 - P0 + D]/P0

= [$26.76 - 15.63 + 0.76]/15.63

= $11.89/15.63

= 76.07%

Therefore rate of return for owning ABC shares in most recent year is 76.07%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An ABC Ltd share was selling for $8.01 two years ago. The share sold for $9.87...
An ABC Ltd share was selling for $8.01 two years ago. The share sold for $9.87 one year ago, and it is currently selling for $28.20. ABC Ltd pays a $1.69 dividend each year-end. What was the rate of return for owning ABC shares in the most recent year? (In percentages to two decimal places eg 2.881% is 2.88; don’t use % sign)
One year ago, you bought a share for $9.76. Unfortunately, the share did not pay you...
One year ago, you bought a share for $9.76. Unfortunately, the share did not pay you any dividends during that year. The share price is now $10.68. What is the return you received on this share? (as a percentage to the nearest two decimal points. don’t use % sign. eg 2.881% is 2.88)
The shares ABC Ltd, a non-dividend paying stock, are currently selling for $25.00 per share. You...
The shares ABC Ltd, a non-dividend paying stock, are currently selling for $25.00 per share. You have developed the following probability distribution of the price one year from now. state of market probability price awful 0.3 $32.50 normal 0.4 $30.00 awesome 0.3 $25.00 The variance of returns for CBC Ltd shares is closest to: a) 0.0054. b) 0.0141. c) 0.0737 d) 0.1187
ABC has preferred shares outstanding. The current price of each preferred share is $120 and it...
ABC has preferred shares outstanding. The current price of each preferred share is $120 and it pays a dividend of $6 each year. What is the required rate of return on this stock, if the next dividend is going to be paid tomorrow? What if the most recent dividend was paid yesterday?
Sains LTD shares are currently selling at $33 per share. The company is expected to pay...
Sains LTD shares are currently selling at $33 per share. The company is expected to pay a dividend of %2.32 per share next year. If the investor's required rate of return is 11.5% per year, estimate the company's growth rate. (Please explain the answer in detail, thank you)
ABC Limited will pay a $5.01 dividend next year (t=1) on its ordinary shares. The shares...
ABC Limited will pay a $5.01 dividend next year (t=1) on its ordinary shares. The shares are currently selling at $68.36 per share. What is the market's required return on this investment if the dividend is expected to grow at 2% forever? (as a percentage to nearest two decimal places; don't use % sign)
ABC Limited will pay a $6.51 dividend next year (t=1) on its ordinary shares. The shares...
ABC Limited will pay a $6.51 dividend next year (t=1) on its ordinary shares. The shares are currently selling at $44.43 per share. What is the market's required return on this investment if the dividend is expected to grow at 3% forever? (as a percentage to nearest two decimal places; don't use % sign) Answer:
9. ABC, Inc stock currently sells for $45 per share. The market requires a 9 percent...
9. ABC, Inc stock currently sells for $45 per share. The market requires a 9 percent return on the firm's stock. If the company maintains a constant 5.5 percent growth rate in dividends, what was the most recent dividend per share paid on the stock? 10. ABC, Inc pays dividends annually. The expected dividend payment in year 5 is $12.00. The growth rate, which is currently 15%, is expected to decline linearly over six years, between year 5 and year...
Two years ago, Albert purchased 100 shares of a particular company’s stock at a price of...
Two years ago, Albert purchased 100 shares of a particular company’s stock at a price of $105.25 per share. Last year, Albert received an annual dividend of $1.45 per share, and at the end of the year, a share of stock was trading at $110.84 per share. This year, Albert received an annual dividend of $1.60 per share and afterward sold all 100 shares at a price of $121.05 per share. In the first column of the following table, enter...
ABC Corp was created from the combination of two smaller companies two years ago. Selected information...
ABC Corp was created from the combination of two smaller companies two years ago. Selected information is as follows, in millions except percentages: FCF current year: $215 WACC: 8.5% Constant growth rate: 3% Short-term investments: $18 Debt: $47 Preferred stock: $10 Number of common stock shares: 12 A.   Show calculations for ABC’s value of operations. B.   Show calculations for ABC’s estimated intrinsic stock price. C.   Which would have the larger effect on your answer in B, a $10 increase in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT