XYZ stock price and dividend history are as follows: ...
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Finance
XYZ stock price and dividend history are as follows:
Year
Beginning-of-Year Price
Dividend Paid at Year-End
2018
$ 100
$ 4
2019
110
4
2020
90
4
2021
95
4
An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four 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.)
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.)
Date
Cash Flow
2018
2019
2020
2021
b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)
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