The following table contains stock price and dividend data for AIG. Use this inf

Question

The following table contains stock price and dividend data for AIG. Use this info for 32 &33. 32. PLEASE EXPLAIN STEPS!!!

32. Compute the stock return for July 2009 using the information below for AIG. Note they had a reverse split of 1:20 on July 4, 2009. (4 Points)

33. Compute the August 2009 stock return AIG. (3 points)

Date Open High Low Close Mar-2010 Feb-2010 an-2010 Dec-2009 Noy-2009 Oct-2009 Sep-2009 Aug-2009 Jul-2009 27.96 24.38 30.53 29.58 34.42 43.57 41.04 13.29 19.65 38.45 29.3 30.54 32.8 40.09 47.42 54.4 55.9 22.96 24.5 21.54 23.04 27.4 28.04 33.02 32.66 12.97 8.22 34.45 24.77 24.23 29.98 28.4 33.62 44.11 45.33 13.14 24-Jul-2009 $1.00 Dividend 04-Jul-2009 1: 20 Stock Split un-2009 1.7 1.74 1.08 1.16

Explanation / Answer

32)

Return = (Ending price x reverse split factor + dividend)/ Beginning price   -1

                = ( 13.14 x 1.20 +1)/1.16 -1

                = 1345.52%

33)

Return = (Ending price)/ Beginning price – 1

                = (45.33/13.14) -1

                = 244.98%

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