In: Finance
XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2015 $ 130 $ 5 2016 144 5 2017 120 5 2018 125 5 An investor buys six shares of XYZ at the beginning of 2015, buys another three shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all eight remaining shares at the beginning of 2018. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.)