In predicting the expected future return of the market

Assignment Help Financial Management
Reference no: EM131022590

In predicting the expected future return of the market, one of the dangers is that: A. the past is not indicative of the future. B. the past period measured is too short to get a reasonable estimate of the future. C. the equity premium does not include the premium on debt. D. the past is not indicative of the future and the past period measured is too short to get a reasonable estimate of the future. E. the past is not indicative of the future and the equity premium does not include the premium on debt.

Reference no: EM131022590

Questions Cloud

Financial leverage impacts the performance of the firm : Financial leverage impacts the performance of the firm by:
Fixed-rate mortgage-loan in form of single balloon payment : You need a 35-year, fixed-rate mortgage to buy a new home for $245,000. Your mortgage bank will lend you the money at an APR of 5.4 percent for this 420-month loan. However, you can afford monthly payments of only $850, so you offer to pay off any re..
What is the amount of the annual interest tax shield : Jasmine's Boutique has 2,000 bonds outstanding with a face value of $1,000 each and a coupon rate of 9%. The interest is paid semi-annually. What is the amount of the annual interest tax shield if the tas rate is 34$? a,58,500 b 60,100 c. 60.750 d. 6..
Which is also the initial yield to maturity : An investor purchases two bonds, one matures in 5 years and the second is a perpetuity. Both bonds have a coupon rate of interest of 7% which is also the initial yield to maturity. You buy a 6-year zero coupon bond for $632 today. Two years from now,..
In predicting the expected future return of the market : In predicting the expected future return of the market, one of the dangers is that: A. the past is not indicative of the future. B. the past period measured is too short to get a reasonable estimate of the future. C. the equity premium does not inclu..
Handout on duration : Find the duration for a 3-year 10% bond with a 7% yield to maturity. Suppose the market interest rate changes to 8%, using the bond’s duration, compute the percentage price change for the bond.
Nursing theory analysis paper on topic peplau theory : Write a Nursing Theory Analysis Paper on Topic: "Peplau's Theory", Write the paper in 10 Pages, Your paper must include Background information, theory description, concept behind Peplau's Theory, concept relationship, Evaluation, assumption, Theory's..
The cash flow of the firm must be equal : The cash flow of the firm must be equal to: A. cash flow to stockholders minus cash flow to debt holders. B. cash flow to debt holders minus cash flow to stockholders. C. cash flow to governments plus cash flow to stockholders. D. cash flow to stockh..
What is the expected return of shareholders : The risk-free rate of return is 8%, the expected return of the market portfolio is 15%, and the stock of Xyrong Corporation has a beta coefficient of 1.2. Xyrong pays out 40% of its earnings in dividends and the latest earnings announced were $10 per..

Reviews

Write a Review

Financial Management Questions & Answers

  Which dividends are expected to grow at a rate

The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 11.0%. What is t..

  You are interested in proposing a new venture to the

you are interested in proposing a new venture to the management of your company. pertinent financial information is

  What is the base case variable cost per unit

A project has earnings before interest and taxes of $14,600, fixed costs of $52,000, a selling price of $29 a unit, and a sales quantity of 16,000 units. All estimates are accurate within a plus/minus range of 3 percent. Depreciation is $12,000. What..

  What is the firms free cash flow of that year

A firm has $ 3 million market value and it sells preferred stock with a par value of $100. If the coupon rate on the preferred stock is 9% and the preferred stock trades at $85, what is the cost of preferred stock financing? A firm reports that in a ..

  Immediate-retirement annuity

An insurance agent is trying to sell you an immediate-retirement annuity, which for a single amount paid today will provide you with $7,200 at the end of each year for the next 35 years. You currently earn 4% on low-risk investments comparable to the..

  Misleading to compare a companys financial ratios

Why is it sometimes misleading to compare a company’s financial ratios with those of other firms that operate in the same industry?

  When striving for effective focus group results

When striving for effective focus group results, _______.

  Split has no effect on the total market value

JPix management is considering a stock split. JPix currently sells for $110 per share, and a 3-for-1 stock split is contemplated. What will be the company's stock price following the stock split assuming that the split has no effect on the total mark..

  Annual incentive fee according to black-scholes formula

A hedge fund with net asset value of $80 per share currently has a high water mark of $88. Suppose it is January 1, the standard deviation of the fund’s annual returns is 49%, and the risk-free rate is 5%. The fund has an incentive fee of 15%. What i..

  Calculate the new bond price

Consider a 5.8 percent coupon bond with eleven years to maturity and a current price of $1,060.10. Suppose the yield on the bond suddenly increases by 2 percent. a. Use duration to estimate the new price of the bond. Calculate the new bond price

  Marketers find a new communication tool with pinterest

For marketers adept at recognizing new opportunities, the online bulletin board Pinterest can provide their companies with a competitive advantage.

  Political influence has exerted upon the budgetary process

Evaluate the level of the impact that political influence has exerted upon the budgetary process overall. Suggest three to four (3-4) strategies that the managers could deploy in order to influence the budget process.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd