Calculate the arithmetic average rate of return

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Reference no: EM132012580

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.

Reference no: EM132012580

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