1. You hold 20 shares of stock worth $12.75 per share on June 1. Over the next 12 months you receive total dividends of $.055 per share. On June 1 of the following year, each share is worth
$12.95.
a. Dividend return: --
b. Appreciation/Deprecation: --
c. Total return: --
d. Cumulative rate of return: --
e. Annualized rate of return: --
What don't you understand about this assignment?
How to do it.. Our teacher never teaches us anything, He gives us a packet and then he leaves the room.
1. Study your textbook,
2, Google each of the terms you don't understand.
We don't have textbooks..
Uh okay..
To calculate the required values, we will need to use the given information and formulas.
a. Dividend return:
Dividend return is the amount of money earned from dividends relative to the initial investment. To calculate the dividend return, multiply the dividend per share by the number of shares:
Dividend return = Dividend per share * Number of shares
In this case, the dividend per share is $0.055, and the number of shares is 20. Therefore:
Dividend return = $0.055 * 20 = $1.10
So, the dividend return is $1.10.
b. Appreciation/Depreciation:
Appreciation or depreciation is the change in the value of the stock over a certain period of time. To calculate the appreciation or depreciation, we need to find the difference between the final value of the stock and the initial value of the stock:
Appreciation/Depreciation = Final value - Initial value
In this case, the initial value of each share is $12.75, and the final value is $12.95. Therefore:
Appreciation/Depreciation = $12.95 - $12.75 = $0.20
So, the appreciation or depreciation is $0.20.
c. Total return:
Total return is the sum of dividend return and appreciation/depreciation. To calculate the total return, add the dividend return and appreciation/depreciation:
Total return = Dividend return + Appreciation/Depreciation
In this case:
Total return = $1.10 + $0.20 = $1.30
So, the total return is $1.30.
d. Cumulative rate of return:
Cumulative rate of return represents the total return as a percentage of the initial investment. To calculate the cumulative rate of return, divide the total return by the initial investment and multiply by 100:
Cumulative rate of return = (Total return / Initial investment) * 100
In this case, the initial investment is the product of the initial value per share and the number of shares, i.e., $12.75 * 20 = $255. Therefore:
Cumulative rate of return = ($1.30 / $255) * 100 = 0.5098%
So, the cumulative rate of return is approximately 0.5098%.
e. Annualized rate of return:
Annualized rate of return is the average rate of return per year. To calculate the annualized rate of return, divide the total return by the initial investment and divide it by the number of years the investment was held:
Annualized rate of return = (Total return / Initial investment) / Number of years
In this case, the investment was held for 1 year, so:
Annualized rate of return = ($1.30 / $255) / 1 = 0.5098%
So, the annualized rate of return is approximately 0.5098%.