Chap10 - Homework Manager - Corporate Finance FIN301-004

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Question 1: Score 0/1 Your response Correct response 22.04 Calculating Returns Suppose a stock had an initial price of $71.00 per share, paid a dividend of $1.65 per share during the year, and had an ending share price of $85.00. The percentage total return was 8.48 (0%) percent. (Input answer as a percent rounded to 2 decimal places without the percent sign.) 22.04 Calculating Returns Suppose a stock had an initial price of $71.00 per share, paid a dividend of $1.65 per share during the had an ending share price of $85.00. The percentage total return was 22.04 with a toler ± 1.0% percent. (Input answer as a percent rounded to 2 decimal places without the percent si Total grade: 0.0×1/1 = 0% Feedback: The return of any asset is the increase in price, plus any dividends or cash flows, all divided by the initial price. The return of this stock is: R = [($85.00 – 71.00) + 1.65] / $71.00 R = 0.2204 or 22.04% Question 2: Score 0/1 Your response Correct response Calculating Yields Suppose a stock had an initial price of $79 per share, paid a dividend of $1.75 per share during the year, and had an ending share price of $98. The dividend yield was 0 (0%) percent and the capital gains yield was 0 (0%) percent . (Input answers as a percent rounded to 2 decimal places, without the percent sign.) Calculating Yields Suppose a stock had an initial price of $79 per share, paid a dividend of $1.75 per share during the yea an ending share price of $98. The dividend yield was 2.22 with a tolerance of ± 1.0% perc capital gains yield was 24.05 with a tolerance of ± 1.0% percent . (Input answers as rounded to 2 decimal places, without the percent sign.) Total grade: 0.0×1/2 + 0.0×1/2 = 0% + 0% Feedback: The dividend yield is the dividend divided by the price at the beginning of the period, so: Dividend yield = $1.75 / $79 Dividend yield = 0.0222 or 2.22% And the capital gains yield is the increase in price divided by the initial price, so:
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This note was uploaded on 10/10/2010 for the course FIN 301 taught by Professor Andelin,stevenle during the Spring '07 term at Pennsylvania State University, University Park.

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Chap10 - Homework Manager - Corporate Finance FIN301-004

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