Question: You need to complete this problem in a spreadsheet and show all your work. Create an excel file that shows your calculations. Clearly indicate your final answer(s). Name the file with the following convention: Lastname-Problem#.xlsx. For instance, Roark-Problem1.xlsx.
Assume that you purchased stock in Buffalo Wildlings Inc for $26 per share. The following chart shows your dividends and the end of year price for each of the past six years:
Year |
Dividends |
Ending Price |
1 |
$0.80 |
$27.50 |
2 |
$0.84 |
$32.50 |
3 |
$0.88 |
$29.34 |
4 |
$0.94 |
$28.12 |
5 |
$1.02 |
$36.05 |
6 |
$1.08 |
$29.95 |
a) Calculate the dividend yield, the capital gains yield and the total return for each year.
b) Calculate the arithmetic average rate of return for the 6 year period.
c) Calculate the geometric average rate of return for the 6 year period.