Percentage Returns

It is usually more convenient to summarize information about returns in percentage terms, rather than dollar terms, because that way your return doesn't depend on how much you actually invest. The question we want to answer is: How much do we get for each dollar we invest?

To answer this question, let P, be the price of the stock at the beginning of the year and let Dt + 1 be the dividend paid on the stock during the year. Consider the cash flows

Ross et al.: Fundamentals V. Risk and Return of Corporate Finance, Sixth Edition, Alternate Edition

12. Some Lessons from Capital Market History

© The McGraw-Hill Companies, 2002

CHAPTER 12 Some Lessons from Capital Market History

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