National Telephone and Telegraph (NTT) Company common stock
currently sells for $60 per share. NTT is expected to pay a $4 dividend
during the coming year, and the price of the stock is expected to increase
to $65 a year from now. Determine the expected (ex-ante) percentage
holding period return on NTT common stock.
b. Suppose that 1 year later, NTT’s common stock is selling for $75 per
share. During the 1-year period, NTT paid a $4 common stock dividend.
Determine the realized (ex-post) percentage holding period return on
NTT common stock.
c. Repeat (b) given that NTT’s common stock is selling for $58 1 year later.
d. Repeat (b) given that NTT’s common stock is selling for $50 1 year later.