CASE STUDY 1
Based on the given information, following are the closing adjusted Domino Pizza Enterprise Limited as of June 30th.
All the amounts listed below are in AUSTRALIAN Currency.
| Year | Closing adjusted price Domino pizza enterprises limited ($) | Dividends paid by Domino pizza enterprises limited (AUD) | Closing adjusted price of Retail Food Group Limited (Aud) | Dividends paid by Retail Food Group Limited (AUD) |
| 2018 | June 29th – 51.00 | Aug 20 : 0.497 Feb 20 : 0.581 | 0.54 | Zero Dividends paid |
| 2017 | 49.69 | Aug 21 : 0.449 Feb 21 : 0.484 | 4.5481 | Sep 11: 0.15 Mar 17: 0.1475 |
| 2016 | 64.10 | Aug 22 : 0.388 Feb 25 : 0.347 | 5.1024 | Sep 09: 0.145 Mar 17: 0.13 |
| 2015 | 33.17 | Aug 21 : 0.272 Feb 19 : 0.246 | 4.7595 | Sep 10: 0.1175 Mar 18: 0.115 |
| 2014 | 19.66 | Aug 22 : 0.190 Feb 18 : 0.177 | 3.8284 | Sep 11: 0.1125 Mar 17: 0.1075 |
| 2013 | 10.11 | June 03 : 0.0214 Feb 19 : 0.155 | 3.1785 (June 28th) | Sep 09: 0.1025 Mar 15: 0.095 |
Based on the above data, below is the holding return period for Domino Pizza
Kindly note: P1 = ending value, P0 = beginning value and D1 = Dividends paid in that period
| Year | HPR |
| 2018 | 5% |
| 2017 | -21% |
| 2016 | 95% |
| 2015 | 71% |
| 2014 | 96% |
To Calculate the Holding period return, the following formula is used.
HPR = (P1 + D1 / P0) -1
Below is the holding period return for Retail Food, the formula used to calculate is the same i.e. HPR = (P1 + D1 / P0) -1
| Year | HPR | |
| 2018 |
| |
| 2017 | -4% | |
| 2016 | 12% | |
| 2015 | 30% | |
| 2014 | 27% |
TASK 2
In order to get the expected return value, the average of the last 5 years returns of both corporation are taken.
For Domino Pizza
The Expected return= 49% (based on the average of the last five year’s return)
=0.05-0.21+0.95+0.71+0.96/5=49%
For Retail Food Group Limited
The expected return= -4% (based on the average of the last five year’s return)
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