You find a certain stock that had returns of 13 percent, −20 percent, 21 percent, and 12 percent for four of the last five years
. The average return of the stock over this period was 9.3 percent. Required:
a. What was the stock’s return for the missing year?
b. What is the standard deviation of the stock’s returns?
Excess cash is a term used in the for the residual cash flow of operation. It is calculated after adding the non cash expenses in the net income of the company and deducting all the capital expenditures. This is the cash balance which is available for the reinvestment purpose and for distribution to the stockholders. This cash can also be used to reduce the gearing of the company and there is a cost attached to it if used for payment of loan, which is the rate or return from the reinvestment of these cash flows.
Answer: No, the corporation did not pay a dividend in 2018.
Explanation: The company would not have paid a dividend in 2018 because they had a net loss. Dividends are the profit of the corporation being divided amongst the owners (shareholders). Since there was no profit there would not be dividends.
