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V W Montara rusa wikipec Ho v roller coaster is ma e 5tuctural Analysis 4th E Two years ago you pur x The Incredible Hulkrol Secure | https://newconnect.mheducati D x × x C t.html Apps welcome, Aaron- (1) WhatsApp web ADF A rays Corp. Pilot Stage 2 Check F Q Private Pilot STAGE 2 Q Private Staga 2 Exam Q Private Pilot Stage 2 Q Prvate Pilot Chapter Q leppesen Pri ate Homework-Chapter #14 Saveo Help Save & Exit Submit Check my work Two years ago, you purchased 100 shares of Coca-Cola Company. Your purchase price was $39 a share, plus a total commission of $29 to purchase the stock. During the last two years, you have recelved the following dividend amounts: $1.25 per share for the first year and $1.39 per share the second year. Also, assume that at the end of two years, you sold your Coca-Cola stock for $46 a share minus a total commission of $34 to sell the stock. 10 (a) Calculate the cividend yield for your Coca Cola stock at the time you purchased it. (Enter your answer as a percent rounded to2 decimal places.) Hiv. idend yield at purchase (b) Calculate the dividend yield for your Coca-Cola stock at the time you sold it. (Enter your answer as a percent rounded to 2 decimal places) ividend yield at sale (c) Calculate the total return for your Coca-Cola investment when you sold the stock at the end of two years. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) return (d) Calculate the annualized holding period yield for your Coca-Cola investment at the end of the two-year period. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) zed holding period yield 0 Type here to search 120 PM 12/10/2017Explanation / Answer
a) Dividend Yield = Dividend Per Share/Price Per Share.
In Year 1, At the time of purchase, Price of Coca Cola Share was $ 39, and received divident per share was $ 1.25
Dividend Yield in Year 1 = 1.25/39 = 0.0321 = 3.21%
b) In Year 2, at the time of sale, price of share was $ 46 while dividend paid $ 1.39 per share
Dividend Yield at the time of sale = 1.39/46 = 0.0302 = 3.02%
c) 100 shares were purchased at price of $39 per share
Total purchase cost = 3900 $
Total commission of $ 29 on purchase of Stock,
Total Purchase cost including commission is $ 3929.
After 2 Years shares were sold at $ 46 Per share
Total sale proceeds = $ 4600
Total commission of $34 to sell the stocks
Net Sale Proceeds after commission = $ 4566
Total Gain = Net Sale Proceeds - Net Purchase Proceeds = $ 637
Dividend in Year 1 was $1.25 per share. Total amount of Dividend Received = $125
Dividend in Year 2 was $1.39 per share. Total amount of Dividend Received = $139
Total Return = (Net Sale - Net Purchase + Total Dividend)/Net Purchase * 100
= (637+125+139)/3929 * 100
= 22.93%
d) Total return 22.93% calculated in step above is total return over holding period of 2 Years.
Annualized Return = [(1 + Holding Period Return) ^ 1/No of Years] - 1
= [(1.2293)^(1/2)] - 1
= 0.1087 i.e 10.87%
Annualized Return is 10.87%
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