Question: 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.
a. 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 Part b given that NTT's common stock is selling for $58 1 year later.
d. Repeat Part b given that NTT's common stock is selling for $50 1 year later.