consider the three stocks in the following table represents price at time t and repr 665368

1. Turn to Figure 2.9 and look at the listing for General Mills.

a. What was the firm’s closing price yesterday?

b. How many shares could you buy for $5,000?

c. What would be your annual dividend income from those shares?

d. What must be its earnings per share?

2. Consider the three stocks in the following table. Represents price at time t, and Represents shares outstanding at time t. Stock C splits two for one in the last period.

P0 Q0 P1 Q1 P2 Q2

A 90 100 95 100 95 100

B 50 200 45 200 45 200

C 100 200 110 200 55 400

3.a. Calculate the rate of return on a price weighted index of the three stocks for the first period.

b. What must happen to the divisor for the price weighted index in year 2?

c. Calculate the rate of return for the second period.