What is the time-weighted rate of return for the investment

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A share of stock is purchase at t = 0 for $100, and at the end of the next year, t = 1, another share is purchased for $120 (ex-dividend stock price). At the end of year 2, both shares are sold after dividend payments for $130 each. At the end of both years 1 and 2, the stock paid a $2.50 per share dividend.

(a) What is the dollar-weighted rate of return for this investment?

(b) What is the time-weighted rate of return for this investment?

Reference no: EM13335553

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