(a) I am assuming that the average historical return (3Y/5Y/10Y) does not take into account the dividend of the stock. or, does it?
Yes, I did take dividends into considerations.
(b) We have the yearly portfolio returns (in summary) and we have the monthly portfolio volatility (which can be converted to yearly volatility). So, using a (very) layman’s approach, I can deduce the yearly Sharpe Ratio for the portfolio for that specific year?
I do not think that is Sharpe Ratio definition, we are missing risk-free return. But that might be risk-adjusted return.
(c) If according to (a) the annual dividends are not included in annual returns and if it is not a sacrilege to use (b), then to get a realistic Sharpe Ratio we should add the dividend % to the yearly return?
It should already be include.