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Question

Secure | https://www.mathd.com/Student/PlayerTest.aspx?testid=172973966&centervinaye; FINC 300 (01): Fall 2017 Test:Exam 2 Submit Test This Question: 3 pts | 1 of 30 (0 complete) mis Test 100 pts possi Question Help Calculating rates of return) Blaxo Balloons manufactures and distributes birthday balloons. At the beginning of the year Blaxo's common stock was selling for $20.33 but by year end it was only $17.36. If the firm paid a total cash dividend of $2.96 during the year what rate of return would you have earned if you had purchased the stock exactly one year ago? What would your rate of return have been if the firm had paid no cash dividend? The rate of return you would have earned is (Round to two decimal places) Therate of retum you would have earned if the fir m paid no cash dividend is decimal places.) 96 Round to two Enter your answer in each of the answer boxes. 13

Explanation / Answer

Po = Purchase Price P1 = Sale Price A) Return on Shares = Dividend Income + (P1 - P0) 2.96 + (17.36 - 20.33) -0.01 Return on Shares in % = Return on Share / P0 * 100 -0.01 / 20.33 * 100 -4.92% B) Return on Shares = (P1 - P0) (17.36 - 20.33) -2.97 Return on Shares in % = Return on Share / P0 * 100 -2.97 / 20.33 * 100 -14.61%

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