Stock A has a beta of .6, and investors expect it to return 5%. Stock B has a beta of 1.4, and investors expect it to return 7%. Use the CAPM to find the expected rate of return on market and the market risk premium.

Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $244,000, has a fouryear life, and requires $76,000 in pretax annual operating costs. System B costs $342,000, has a sixyear life..

What is the most important part of a business plan in general? Considering the way you intend to use your business plan, what will be the most important part specific to your plan?

You have been diligently saving to buy a boat. For the last 10 years, you have been putting $50 per month into a secret savings account paying .5% interest per year. You started with $0. You just discovered that your spouse knew about the account the..

Deltona issued preferred shares four years ago at $60 per share, with a promised dividend of $5 per share. The company's tax rate is 35%, and its common stock beta is 0.80. Yields on comparable risk preferred stocks are 9%. The floatation expense per..

MV corporation has debt with Market value of $100 million, common equity with a book value of $100 million, and preferred stock woth $20 million outstanding. Avicorp has a $10 million debt issue outstanding, with a 6% coupon rate. The debt has semian..

The most recently paid dividend by Bridges & Associates was $0.625 per share. The annual growth of its dividends is expected to be 20%, 25% and 35% in the following 3 years. After 3 years, dividend growth will slow down to a constant rate of 6% a yea..

Your employer contributes $75 a week to your retirement plan. Assume that you work for your employer for another 20 years and that the applicable discount rate is 7.5 percent. Given these assumptions, what is this employee benefit worth to you today?

The riskfree interest rate 2% and the mean return on the market portfolio of risky assets is 8%. You are analyzing three individual stocks. The first has a mean return of 5.5% and a beta of 0.5. The second has a mean return of 6.5% and a beta of 0.7..

Killer Whale, Inc. has the following balance sheet statement items: total current liabilities of $693186; net fixed and other assets of $1832451; total assets of $3472745; and longterm debt of $806548. What is the amount of the firm's current assets..

Suppose you have just signed a professional contract to play cricket in Argentina. The contract is for 4 years and is as follows. You get an immediate signing bonus of $280,000, followed by four years of quarterly payments of $75,000. You plan to inv..

Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. Both bonds have 19 years to maturity, make semiannual payments, and have a YTM of 9 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..
