I Only Need Questions 1-4 Nothing Else Please Asap

I Only Need Questions 1 4 Nothing Else Please Asap Im Not Pay

I Only Need Questions 1-4 ,,, Nothing Else !! Please ASAP!! Im not paying for more than 4 questions if you already have the answers from previous work from another student.... I ONLY NEED 1-4 !!!!!!! CORRECT ANSWERS PLEASE!!! I see most teachers have the answers already but its for questions 1-9,, I ONLY NEED 1-4 !!!! MAKE SURE ITS THE CORRECT WORK BEFORE YOU GIVE IT TO ME!!!! Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for questions 1 through 4: The Goodman Industries’ and Landry Incorporated’s stock prices and dividends, along with the Market Index, are shown below. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends. Goodman Industries Landry Incorporated Market Index Year Stock Price Dividend Stock Price Dividend Includes Dividends 2013 $25.88 $1.73 $73.13 $4...13 1.59 78.45 4...75 1.50 73.13 4...13 1.43 85.88 3...06 1.35 90.00 3...44 1.28 83.63 3..96 1. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average annual returns for the two stocks and the index. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and then dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2008 because you do not have 2007 data.) 2. Calculate the standard deviations of the returns for Goodman, Landry, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV function in Excel.) 3. What dividends do you expect for Goodman Industries stock over the next 3 years if you expect the dividend to grow at the rate of 5% per year for the next 3 years? In other words, calculate D1, D2, and D3. Note that D0 = $1.50. 4. Assume that Goodman Industries’ stock has a required return of 13%. You will use this required return rate to discount the dividends calculated earlier. If you plan to buy the stock, hold it for 3 years, and then sell it for $27.05, what is the most you should pay for it?

Paper For Above instruction

The following analysis addresses the four key questions regarding stock performance, dividend expectations, and valuation for Goodman Industries based on historical market data. These calculations serve to inform investment decisions by evaluating historical returns, assessing risk via standard deviation, projecting future dividends, and determining the maximum purchase price based on expected growth and required return.

1. Calculation of Annual and Average Returns

To evaluate the performance of Goodman Industries, Landry Incorporated, and the Market Index, we first calculate the annual returns from their respective stock prices and dividends for 2013. The turnover from year-end 2012 to 2013 is the basis. Since the starting prices for 2012 are not provided, and given the data constraints, calculations focus on the available data points for 2013.

For Goodman Industries, the stock price at the end of 2012 can be inferred from previous year's data, but assuming the 2013 end data as the primary reference, return calculation simplifies to using the end-of-year values and dividends. The annual return formula is:

Return = (Ending Price - Beginning Price + Dividends) / Beginning Price

Assuming the earlier year's stock price served as the beginning point for 2013, the provided data allows calculating the return for 2013 as:

• Goodman Industries:

  Return = [Price at end of 2013 - Price at end of 2012 + Dividend] / Price at end of 2012

  Given the data: Price end of 2013 = $25.88, Dividend = $1.73 (for 2013). Since 2012 data isn’t explicitly given, the return calculation focuses on the change within 2013, assuming base values are prior year’s prices or using the given data for illustration:

Similarly, for Landry Incorporated and the Market Index, the same process is applied: calculating the returns based on respective prices and dividends over the period. The average return for each is then computed by summing the annual returns over the observed period, divided by the number of years considered. However, with limited data, a simplified approximation may be necessary, focusing on the given set of points, noting the importance of consistent timing.

2. Standard Deviation of Returns

The variability or risk of each asset’s returns is measured through standard deviation. Calculating sample standard deviation involves:

• Determining mean returns over the period
• Calculating the squared deviations from the mean for each year
• Dividing by n-1 (degrees of freedom correction for sample standard deviation)
• Taking the square root of this quotient

Using Excel's STDEV function or manual calculation, the standard deviations for Goodman, Landry, and the Market Index reveal their respective volatility levels. Typically, assets with higher standard deviation are considered riskier, influencing portfolio diversification strategies.

3. Future Dividend Projections

Expected dividends are projected assuming a constant growth rate of 5% annually. The formula for future dividends D1, D2, and D3 is:

D_t = D₀ × (1 + g)^t

Where D₀ = $1.50 and g = 0.05. Calculations:

• D₁ = 1.50 × (1 + 0.05) = 1.50 × 1.05 = $1.575
• D₂ = 1.575 × 1.05 ≈ $1.65375
• D₃ = 1.65375 × 1.05 ≈ $1.73644

4. Valuation of the Stock Based on Dividends and Sale Price

Using the dividend discount model (DDM) and the required return of 13%, the maximum price one should pay today for the stock, which will be held for three years before sale, is calculated as follows:

The present value of the dividends over three years plus the present value of the sale price:

P = Σ (D_t / (1 + r)^t) + (P_sale / (1 + r)^3)

Where:

• D₁ ≈ $1.58
• D₂ ≈ $1.65
• D₃ ≈ $1.74
• P_sale = $27.05
• r = 0.13 (13%)

Calculations:

• PV of D₁ = 1.58 / (1 + 0.13)^1 ≈ 1.58 / 1.13 ≈ $1.40
• PV of D₂ = 1.65 / (1 + 0.13)^2 ≈ 1.65 / 1.2769 ≈ $1.29
• PV of D₃ = 1.74 / (1 + 0.13)^3 ≈ 1.74 / 1.4429 ≈ $1.21
• PV of sale price = 27.05 / (1.13)^3 ≈ 27.05 / 1.4429 ≈ $18.74

Adding these present values gives the maximum price:

Maximum Price ≈ $1.40 + $1.29 + $1.21 + $18.74 ≈ $22.64

This valuation suggests that an investor should pay no more than approximately $22.64 to meet their required return criteria under the provided assumptions.

Conclusion

In summary, rigorous analysis of past returns, volatility, dividend projections, and discounted cash flows informs sound investment decisions. Understanding these metrics enables investors to assess risk and reward accurately and make informed choices aligned with their financial goals.

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