Based on past 26 years, Westerfield Industrial Supply's common stock has yielded an arithmetic average rate of return of 9.63 percent. The geometric average return for the same period was 8.57 percent. What is the estimated return on this stock for the next 4 years according to Blume's formula?
A) 8.70 percent
B) 8.92 percent
C) 9.13 percent
D) 9.38 percent
E) 9.50 percent
Correct Answer:
Verified
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