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1)Suppose you bought 150 shares of stock at an initial price of $47 per share. T

ID: 2770208 • Letter: 1

Question

1)Suppose you bought 150 shares of stock at an initial price of $47 per share. The stock paid a dividend of $.46 per share during the following year, and the share price at the end of the year was $50. Compute your total dollar return on this investment.

2)The rate of return on Cherry Jalopies, Inc., stock over the last five years was 15 percent, 11 percent, -1 percent, 4 percent, and 13 percent. Over the same period, the return on Straw Construction Company’s stock was 16 percent, 20 percent, -3 percent, 1 percent, and 12 percent.

Calculate the variances and the standard deviations for Cherry and Straw.

1)Suppose you bought 150 shares of stock at an initial price of $47 per share. The stock paid a dividend of $.46 per share during the following year, and the share price at the end of the year was $50. Compute your total dollar return on this investment.

Explanation / Answer

1 answer

total dollar return on this investment = dividend return + capital yield

= .46*150+(50-47)*150=519