First cash flow of venture is expected in year five

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1. Stock Y has a beta of 1.05 and an expected return of 13 percent. Stock Z has a beta of .70 and an expected return of 9 percent. If the risk-free rate is 5 percent and the market risk premium is 7 percent, what are the reward-to-risk ratios of Y and Z?

2. Suppose that the first cash flow of a venture is expected in Year 5, and expected to be $6,024,605. Cash flows will grow at a rate of 4% after that. Find the present value of the venture in dollars (at Year 0) assuming a discount rate of 19%

3. An Australian export company wishes to sell its euro receipts, EUR 500 000, through an FX dealer and receives the following quote: ‘Aussie mark spot is one-twenty-two fifty-five to sixty five’. What is the value of the export receipt?

Reference no: EM131891905

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