Accounting

9. You’ve recorded the following prices and dividend payments for a stock:

Date

1/2

4/1

0.65

7/1

0.65

10/1

0.65

1/2

0.65

You bought the stock at on Jan. 2 of the first year and sold it on Jan. 2 of the next year, just after the dividend payment, and reinvested all dividends in the meantime.

What was your realized return over the year?

10. Below are the returns for different asset classes for a particular year:

Asset class
T-bills
Corporate bonds
Small company stocks
Large company stocks

a. What was the excess return for corporate bonds?

b. What was the excess returnfor small company stocks?

c. What was the excess returnfor largecompany stocks?

11. You bought a share of stock for $100. It is now worth $105 and has just paid an annual dividend of $2 per share.

a. What was the dividend yield?

b. What was the capital gains yield?

c. What was the total rate of return?

Solution:

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