What is the expected return of each asset

Assignment Help Business Management
Reference no: EM131397789

Respond to the items below.

Part A: Moore Company is about to issue a bond with semiannual coupon payments, a coupon rate of 8%, and par value of $1,000. The yield-to-maturity for this bond is 10%.

a. What is the price of the bond if the bond matures in 5, 10, 15, or 20 years?

b. What do you notice about the price of the bond in relationship to the maturity of the bond?

Part B: The Crescent Corporation just paid a dividend of $2 per share and is expected to continue paying the same amount each year for the next 4 years. If you have a required rate of return of 13%, plan to hold the stock for 4 years, and are confident that it will sell for $30 at the end of 4 years, how much should you offer to buy it at today?

Part C: Use the information in the following table to answer the questions below.

State of Economy

Probability of State

Return on A in State

Return on B in State

Return on C in State

Boom

.35

0.040

0.210

0.300

Normal

.50

0.040

0.080

0.200

Recession

.15

0.040

-0.010

-0.260


a. What is the expected return of each asset?

b. What is the variance of each asset?

c. What is the standard deviation of each asset?

Reference no: EM131397789

How information in article relates to diversity in workplace

How the information in this article relates to diversity in the workplace? How the information is beneficial or not beneficial? How it could be utilized in the workplace? Whic

Training plan for global managers

Make a prioritized list of what you consider important in a training plan for global managers. Your list should contain a minimum of 10 items along with justification for e

What actions have companies taken to try to turn corner

What actions have these companies taken to try to turn the corner? How have they changed their strategies or business models? Is it possible to reposition in this challengin

How might a foreigner make a good first impression

What is one important point associated with negotiations? What are some rules of thumb associated with meeting and greeting? How might a foreigner make a good first impression

Because of this high degree of connectedness

With so many ways to stay connected (e-mail, voice mail, , text messaging, and so on) and with many people feeling overwhelmed because of this high degree of connectedness,

Life changing experience

The famous story of Mahatma Gandhi being kicked off a train created a life changing experience. However, his return ride from Durban to Pretoria had much different results.

Description of employee benefits

Describe to management the primary strategic consideration involved in managing the proposed benefits program - Memo to upper management detailing the benefits available to em

Inventory requirements of the electric fans component

The determination of inventory requirements of the electric fans component parts and finished goods. The selection of an appropriate inventory system (fixed order quantity, tw

Reviews

Write a Review

 
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