1 An investor bought 3 shares of stock A in 2010 aer ex-dividend dae activly traded...

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Answer 1

Answer #1

Beg of year	Stock Price	# of new shares purchased	Cumulative # shares entitles to dividend	CF from dividends	CF from buying/selling stock	Investor's net cash flow
2010	100	3	0	0	-300	-300
2011	110	2	3	6	-220	-214
2012	90	-1	5	10	90	100
2013	95	-4	4	8	380	388

IRR = IRR(-330,-214,+100,+388) = -2.2%

Return on stock = -330-214+100+388/(330+214) = -0.05x

Answer 2

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