Market value leverage is higher than book value leverage

Assignment Help Financial Management
Reference no: EM13895548

True or false

1. If asset A has a standard deviation of .2 and asset B has a standard deviation of .2, then any portfolio that involves positive investment in both asset A and asset B will also have a standard deviation of .2.

2. For most firms, market value leverage is higher than book value leverage.

3. Since interest rates are currently very low, most newly issued corporate bonds are not callable.

Reference no: EM13895548

Questions Cloud

Asset are uncorrelated and both have sharpe ratio : Suppose asset A and asset B are uncorrelated and both have a Sharpe ratio of .4. Then a portfolio consisting of equal investment in asset A and asset B will also have a Sharpe ratio of .4. Glover Inc. has a WACC of .07 and a tax rate of .30. If it is..
Integrate financial analyses into general business managemen : Integrate financial analyses into general business management planning and decision making
Explain the importance of the compensation strategy aligning : Explain the importance of the compensation strategy aligning with the organization strategic vision. Explain 2 market factors that are used to create a competitive pay strategy.
Find differential equation that equilibria at integer value : Find an example of a differential equation that has equilibria at each integer value and each of these equilibria is a node. Find an example of a differential equation that has exactly 2 equilibrium points, each of which is ..
Market value leverage is higher than book value leverage : If asset A has a standard deviation of .2 and asset B has a standard deviation of .2, then any portfolio that involves positive investment in both asset A and asset B will also have a standard deviation of .2. For most firms, market value leverage is..
Differences between liberalism and conservatism : Explain the differences between Liberalism and Conservatism? and Does ideology really make a difference in the United States today? Support your reasoning with examples. and How does this impact American culture, government and politics in your opini..
Banned from using health-related information : In Sweden, health insurance firms are banned from using health-related information, such as age, sex, or occupation determine health insurance rates .This ban is aimed at increasing the insurance premiums for healthy young Swedish people while decrea..
Program for developing non-verbal communication skills : 60 children, ages 3-5, are selected to participate in a program for developing non-verbal communication skills. The children were selected on the basis of extremely low scores on a test of non-verbal communication. After participating in the progr..
Concepts associated with making capital investment decisions : concepts associated with making capital investment decisions such as cash flows

Reviews

Write a Review

Financial Management Questions & Answers

  Calculating annuity cash flows

If you put up $42,000 today in exchange for a 6.50 percent, 16-year annuity, what will the annual cash flow is? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  Highest tax bracket for ordinary income

Jeanie acquires an apartment building in 2003 for $260,00 and sells it for $500,000 in 2014. At the time of sale, there is $78,000 of accumulated straight-line depreciation on the apartment building. Assuming Jeanie is in the highest tax bracket for ..

  Hauling coal has estimated net cost

A truck for hauling coal has estimated net cost of $55,000 and expected to give service life of 250,000 miles with salvage value of $5,000. Compute the allowed depreciation amount for truck usage of 30,000 miles.

  Riskier stock exceed that on the less risky stock

Stock R has a beta of 2.1, Stock S has a beta of 0.60, the expected rate of return on an average stock is 9%, and the risk-free rate is 5%. By how much does the required return on the riskier stock exceed the required return on the riskier stock exce..

  What would an investor pay for a stock

What would an investor pay for a stock, if his required rate of return is 12%, the stock next year’s dividend is $3/share, and the dividend is expected to grow at 4%?

  What was deltas payout ratio for fiscal year

Delta Corporation earned $2.50 per share during fiscal year 2011 and paid cash dividends of 1.00 per share. During the fiscal year that just ended on December 31, 2012, Delta earned $3.00 per share, and the firm’s managers expect to earn this amount ..

  What is the probability index of the cash flow

What is the probability index of the cash flow in 6.15?

  Making semi-annual payments

LKM, Inc, wants to issue new 20 year bonds for some much needed expansion projects. The company currently has bonds on the market that sell for $972.78, making semi-annual payments, with a 6.5% coupon rate. What is the yield to maturity of the bond?

  Permitted to pay one-third the normal annual payment

A $20,000 loan with interest at 3.5% is being repaid by 35 level annual payments, the firs one due one year hence. Beginning with the 17th payment, the borrower is permitted to pay one-third the normal annual payment. After the 12th reduced payment, ..

  Assume the market price of a 5-year bond for margaret inc

assume the market price of a 5-year bond for margaret inc. is 900 and it has a par value of 1000. the bond has an

  How much would the annual payments be

Darshak won a $1,000,000 lottery which will pay $5,000 at the beginning of each month for the next 30 years. If the payments were made at the beginning of each year for the next 30 years rather than at the beginning of each month, how much would the ..

  Calculate the bond equivalent rate on fed funds

If the overnight Fed funds rate is quoted as 3.20 percent, what is the bond equivalent rate? Calculate the bond equivalent rate on Fed funds if the quoted rate is 4.70 percent.

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