Assume the expected returns on these stocks

Assignment Help Financial Management
Reference no: EM13950118

You own a portfolio that has $2,800 invested in Stock A and $3,900 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 percent, respectively.

Required:

What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Reference no: EM13950118

Questions Cloud

What is the flexible-budget variance for february : Donellan Company has a standard and flexible budgeting system and uses a two-variance analysis of factory overhead. What is the flexible-budget variance for February
What is the estimated return on the stock : Mark would like to purchase a stock priced at $70. The stock is not expected to pay any dividends in the coming year. He can either put up the entire amount and purchase the stock, or borrow $35 from his brokerage firm at an annual interest rate of 1..
Expected return-what must the beta of this stock : A stock has an expected return of 14.8 percent, the risk-free rate is 5.8 percent, and the market risk premium is 7.5 percent. What must the beta of this stock be?
What must the expected return on this stock : A stock has a beta of 1.18, the expected return on the market is 11.2 percent, and the risk-free rate is 4.85 percent. What must the expected return on this stock be?
Assume the expected returns on these stocks : You own a portfolio that has $2,800 invested in Stock A and $3,900 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 percent, respectively. What is the expected return on the portfolio?
State offers three different payout plans : You just got a call from your uncle indicating he just won $40,000 in the New York Take Five. He needs some financial advice. The state offers three different payout plans: He can receive $40,000 today, b: He can receive $100 per week for 10 years,
What is target debt-equity ratio : Fama’s Llamas has a WACC of 10.9 percent. The company’s cost of equity is 14.4 percent, and its cost of debt is 8.3 percent. The tax rate is 38 percent. What is Fama’s target debt-equity ratio?
Firm has debt issue outstanding with nine years : ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with nine years to maturity that is quoted at 117 percent of face value. The issue makes semiannual payments and has an embedded cost of 11 percent annua..
What is the bank cost of preferred stock : Sixth Fourth Bank has an issue of preferred stock with a $6.40 stated dividend that just sold for $126 per share. What is the bank’s cost of preferred stock?

Reviews

Write a Review

Financial Management Questions & Answers

  To minimize collection float

To minimize collection float, a firm should do which of the following?

  Evaluating a project that costs

We are evaluating a project that costs $500,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 50,000 units per year. Calculate the best-case a..

  What was the hospitals original profit forecast

What was the hospital's original profit forecast (assume away any issues with depreciation, taxes, etc.)? Halfway through the fiscal year, what is the hospital's revised projection for FY11 profits?

  Treasury investments that mature in two years

A bank has invested in U.S. Treasury investments that mature in two years. They will be held until maturity. The investments are funded with three-year maturity time deposits. The primary risk this bank faces is

  Savings account at bank and made an initial deposit

You opened a savings account at a bank and made an initial deposit. The account pays 8% interest compounded annually. You made no additional deposits and in exactly one year you close the account and take out off of the money. The balance at the time..

  The expected cash flows for newly planned project

Calculate the NPV for a project with the following cash flows, a cost of capital of 10% and an initial investment of 35,000. The expected cash flows for a newly planned project are $5,000 per year for the first three years and then $6,000 for the nex..

  Events involving a recent purchase of inventory

Shany market recorded the following events involving a recent purchase of inventory

  The transaction is called going public

When stock in a closely held corporation is offered to the public for the first time, the transaction is called “going public,” and the market for such stock is called the new issue market. It is possible for a firm to go public and yet not raise any..

  What are its discretionary financing needs

Tulley Appliances, Inc. projects next year’s sales to be $20 million. Current sales are at $15 million, based on current assets of $5 million and fixed assets of $5 million. The firm’s net profit margin is 5 percent after taxes. Tulley forecasts that..

  Risk-free rate and market risk premium

Stock Y has a beta of 1.8 and an expected return of 18.2 percent. Stock Z has a beta of 0.8 and an expected return of 9.6 percent. If the risk-free rate is 5.2 percent and the market risk premium is 6.7 percent, the reward-to-risk ratios for stocks Y..

  To finance its ongoing construction project

To finance its ongoing construction project, Bowen-Roth Inc. will need $5,000,000 of new capital during each of the next 3 years. The firm has a choice of issuing new debt or equity each year as the funds are needed, or issue only debt now and equity..

  Using discounted cash flow approach what is cost of equity

The earnings, dividends and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelby's common stock sells for $23 per share, its last dividend was $2.00 and the company will pay a dividend of $2.14 at the end of the curren..

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