What is the holding period return and internal rate of return of your investment

Question

What is the holding period return and internal rate of return of your investment if you had bought Walmart stock in December 2001 and sold it in December, 2015? Please, use the data in the Table 2 to answer this question.

A. 62.85% and 5.987%

B. 55.29% and 9.0%

C. 89.21% and 4.908%

D. 77.52% and 3.995%

Table 2 Dividend Paid per Walmart Stock during the year Closing Stock Price Closing Stock Price of Target 32.25 41.05 30 38.4 51.93 54.97 57.05 50 34.52 48.36 60.13 51.22 59.16 63.27 75.7 S&P; 500 Index Value 1320.28 1148.08 879.82 1111.92 1211.92 1248.29 1418.3 1468.36 903.25 1115.1 1257.64 1257.6 1426.19 1848.36 2080.35 Date of Walmart 31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04 53.12 57.54 50.5 53.05 31-Dec-05 52.82 46.79 46.18 47.52 56.06 53.45 31-Dec-11 53.93 59.75 68.23 78.69 31-Dec-15 86.79 4 0.28 0.36 0.52 0.6 0.672 0.88 0.952 1.092 1.212 1.46 1.592 1.88 1.92 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 10 13 31-Dec-12 31-Dec-13 31-Dec-14 16 17 18 19

Explanation / Answer

C. 89.21% and 4.908%

Cash flow 31-Dec-01 -53.12 31-Dec-02 0.28 31-Dec-03 0.3 31-Dec-04 0.36 31-Dec-05 0.52 31-Dec-06 0.6 31-Dec-07 0.672 31-Dec-08 0.88 31-Dec-09 0.952 31-Dec-10 1.092 31-Dec-11 1.212 31-Dec-12 1.46 31-Dec-13 1.592 31-Dec-14 1.88 31-Dec-15 88.71 Total 47.39 Holding Period return =(total Cash flow)/Intial Investment =47.39/53.12 89.21% IRR using Excel IRR Funiton 4.908%

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