Time weighted rate of return

[Sujatha sundarji]

Can someone explain me how ending price is 120 during the first holding period

 

[David Harper CFA FRM]

Hi @Sujatha sundarji That's just a given assumption (you have no way of inferring it indirectly!). The problem is giving you, to assume, that the price increases from $100 to $120 (at end of year 1) to $130 (at end of year 2) and further than the dividend is $2 per share. Given that, the solution looks good to me! Thanks,