Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Problem: Security Market LineYou plan to invest in Kish Hedge fund, which has total capital of $500 million invested in 5 stocks:Sock Investment Stock's Beta coefficientA $160 million 0.5B $120 million 1.2C $80 million 1.8D $80 million 1.0E $60 million 1.6
Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk free rate is 6%, and you believe the following probability distribution for future market returns is realistic:
Probability Market Return0.1 -28%0.2 00.4 12%0.2 30%0.1 50%
a.What is the equation for Security Market Line (SML)? (Hint : First determine the expected market return)b.Calculate Kish's required rate of return.c.Suppose Rick Fish, the president, receives a proposal from a company seeking new capital. The amount needed to take a position in the stock is $50 million, it has an expected return of 15%, and its estimated beta is 1.5. should Kish invest in the new company? At what expected rate of return should Kish be indifferent to purchasing the stock?
Explain the four time value of money concepts - present value, present value of an annuity, future value, and future value of annuity.
When you look at designing tests you have to 1st look at what objectives are you are trying to get. For example if you look at cash in banks you know that there are 2 main objectives:
Illustrate out the foreign exchange risk? What specific problems does foreign exchange present in an organization? How could an organization needing Euros in six months protect itself from currency fluctuations?
Set up the fund of semi-annual payments to be compounded semi-annually to accumulate the some of $100,000 after 10 years at 8 percent annual rate (20 payments). Find out how much the semi-annual payment should be. (round to whole numbers.)
Compute the return on the investment and What is the rate of return that Pedro is being promised
Dudek Manufacturing's common stock is currently selling for 45$ per share. Their most recent divided (yearly) was $2.50, & is expected to grow at 5 percent per year indefinitely.
An investor deposits $50,000 today in the interest bearing account. How much would the investor accumulate by the end of five years if interest is compounded monthly?
For discussion purposes counter statement that it is worse for auditors to incorrectly predict bankruptcy than when auditors fail to predict bankruptcy.
Computation of default risk premium on the corporate bond and market's forecast for given years and what is the market's forecast for 1-year rates 1 year from now
Find what is the company's dollar dividend payment per share each quarter?
Q. Compute the present value of a two-period annuity of $1 per period if the discount rate is 10 percent, A two-period annuity of $1 per period has a present value of $1.808. Find the discount rate from the present value table.
Explain questions on investments and transfer pricing and capital budgeting and One criticism of the payback method is that it ignores cash flows that occur after the payback point has been reached
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd