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johnpaech johnpaech
wrote...
Posts: 1098
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6 years ago
Assume that you purchased Ford Motor Company stock at the closing price on December 31, 2008 and sold it at the closing price on December 30, 2009.  Your realized annual return for the year 2009 is closest to:
A) -45.1%
B) -44.5%
C) -48.5%
D) -47.3%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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Replies
wrote...
6 years ago
A
Explanation:  A)
Date   Price ($)   Dividend ($)   Return   (1 + return)   
December 31, 2008   $14.64         1   1
January 26, 2009   $13.35   $0.10   -8.13%   0.918716   0.918716
April 28, 2009   $9.14   $0.10   -30.79%   0.692135   0.635875
July 29, 2009   $10.74   $0.10   18.60%   1.185996   0.754145
October 28, 2009   $8.02   $0.10   -24.39%   0.756052   0.570173
December 30, 2009   $7.72      -3.74%   0.962594   0.548845
               
               
      The Product of
(1 + returns) - 1 =         -0.45116
The last column in the table contains the cumulative product of (1 + returns)
johnpaech Author
wrote...
5 years ago
You took a load off my back, thanks for answering correctly
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