Find two publicly traded stocks in different industries

Assignment Help Financial Management
Reference no: EM131064745

Find two publicly traded stocks in different industries and look up estimates of their β. (a) Using Rf=1%, E(Rm) = 8%, calculate the E(r) for each stock. (b) Explain in words a non-finance student could understand why the one stock has a higher expected return than the other.

Reference no: EM131064745

Questions Cloud

Mean value and total value of the sales vouchers : A company files its sales vouchers according to their value so that they are effectively in four strata. A sample of 200 is selected and the strata means calculated.
What is the firm cost of preferred stock : During the last few years, Agile technologies has been too constrained by the high cost of capital to make many capital investments. Recently, though, money costs have been declining, and the company has decided to look seriously at a major expansion..
Explain whether this economy illustrates a trade surplus : If the Government wanted to stimulate this economy, raising National Income, or GDP by $25 Billion, what would be the amount of change required in Government Autonomous Expenditure AND explain briefly WHY this amount is equal to, greater than, or ..
Large production centres in two towns : A company has large production centres in two towns. The table below represents the distribution of weekly pay of the full-time production staff at these two centres:
Find two publicly traded stocks in different industries : Find two publicly traded stocks in different industries and look up estimates of their β. (a) Using Rf=1%, E(Rm) = 8%, calculate the E(r) for each stock. (b) Explain in words a non-finance student could understand why the one stock has a higher expec..
Assume the interest rate on pounds sterling and euro : Assume the interest rate is 7% on pounds sterling and 16% on Euro. If the Pound is selling at a one-year forward premium of 8% against the Euro, which one of the followings is correct?
The mileages recorded for a sample of company : (Data set CSE8.xlsx can be found on the book's online platform.) Determine the mean, mode and a five figure summary of the data. What do these descriptive statistics tell you about the distribution of the data?
What is your time-compounded annual rate of return : Suppose that 5 years from now you will receive $10,000 at the end of every year for 5 years. What is the present value of this annuity if the opportunity cost rate is 5%? What is the future value of $300 deposited into a mutual fund account at the en..
Explain the role of ethics in the regulatory environment : Discuss the ways that compliance with the regulations is beneficial to the company, industry, and consumers. Examine how the agency you selected and your selected company work together.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the sustainable growth rate

Johnson Products earned $5.20 per share last year and paid a $2.15 per share dividend. If ROE was 16 percent, what is the sustainable growth rate?

  Risk-free rate and expected return on the market

Company A stock sells at $55 a share. It has β = 1.25 and σ = .44. The risk-free rate is 4%, and the expected return on the market is 11%. You have formed a portfolio with these two items in it:

  Estimate the value of the companys stock

You can estimate the value of a company's stock using models such as the corporate valuation model and the dividend discount model. Which of the following companies would you choose to evaluate if you were using the corporate valuation model to estim..

  All coupons were immediately spent when received

8 years ago you purchased a 6 percent coupon bond for $945. Today you sold your bond for its face value of $1,000. Coupon payments are made annually. What is your rate of return on the bond in each of the following situations: a) all coupons were imm..

  Projects are mutually exclusive-produces annual cash flows

Project H requires an initial investment of $100,00 that produces annual cash flows of $45,000 per year for each of the next 3 years. Project T also requires an initial investment of $100,000 and produces cash flows of $30,000 in year 1, $40,000 in y..

  What is the value of estate-is there any estate tax payable

In 2008 Ann and George established a living trust. Ann and George have 2 children Eva and Greg (ages 19 and 21) from the current marriage and Ann has a child Maria (age 33) from a prior marriage. What is the value of Ann’s estate? Is there any estate..

  Relationship exists in the corporate form of organization

Who also corporation? Describe the process whereby The owners control the firm's management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context coma walk kinds of problems can arise?

  Synergy between two companies-compound rates

Synergy between two companies: Compound rates, not discount rates, are used in an attempt to?

  What is cost of preferred stock

Greenberg Corp. is considering opening a subsidiary to expand its operations. To evaluate the proposal, the company needs to calculate its cost of capital. You've collected the following information: The firm has one bond outstanding with a coupon ra..

  Life is expected with no anticipated value thereafter

A new computer server costs $860,000, delivered and installed. Annual operating costs are $32,000. A five year life is expected with no anticipated value thereafter. Given a required rate of return of 12%, what is the equivalent annual cost of the se..

  What is the best estimate of the stocks current market value

Burke Tires just paid a dividend of D0 = $2.50. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the..

  What is the expected rate of return on a stock with beta

The risk-free rate of return is 6.0 percent and the market risk premium is 14 percent. What is the expected rate of return on a stock with a beta of 1.9?

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