Suppose Kashweka purchases 100 shares of ZB on 1 January at K50 per share. ZB pays K2.30 annual dividend per share on 15 March, when the stock is trading at K55 . On 23 February 2001 , ZB splits its stock in a three for two ratio effective on 30 May, when the stock is trading at K60. If ZB closes on 31 December at K35 per share What would Kashweka’s rate of return be using the linking method? Date Dividend per share ($) Market price when dividend is received ($) 1 January 100 15 February 2 80 15 May 2 95 15 August 2 105 15 November 2 120 31 December 100 Calculate the time weighted rate of return for ZB using both the Linking Method and the Index Method.
Suppose Kashweka purchases 100 shares of ZB on 1 January at K50 per share. ZB pays K2.30 annual dividend per share on 15 March, when the stock is trading at K55 . On 23 February 2001 , ZB splits its stock in a three for two ratio effective on 30 May, when the stock is trading at K60. If ZB closes on 31 December at K35 per share What would Kashweka’s rate of return be using the linking method? Date Dividend per share ($) Market price when dividend is received ($) 1 January 100 15 February 2 80 15 May 2 95 15 August 2 105 15 November 2 120 31 December 100 Calculate the time weighted rate of return for ZB using both the Linking Method and the Index Method.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose Kashweka purchases 100 shares of ZB on 1 January at K50 per share. ZB pays K2.30 annual dividend per share on 15 March, when the stock is trading at K55 . On 23 February 2001 , ZB splits its stock in a three for two ratio effective on 30 May, when the stock is trading at K60. If ZB closes on 31 December at K35 per share What would Kashweka’s
| Date | Dividend per share ($) | Market price when dividend is received ($) |
| 1 January | 100 | |
| 15 February | 2 | 80 |
| 15 May | 2 | 95 |
| 15 August | 2 | 105 |
| 15 November | 2 | 120 |
| 31 December | 100 | |
Calculate the time weighted rate of return for ZB using both the Linking Method and the Index Method.
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