Stock value by using capital asset pricing model

Assignment Help Accounting Basics
Reference no: EM13154112

An investor is looking to buy stock in Company XYZ. The earnings in the last year were $9.50 a share and expected to grow 3% a year for the upcoming 5 years. The current return on benchmark investments is 11%. Using the Capital Asset Pricing Model what is the stock value for XYZ Company?

Reference no: EM13154112

Questions Cloud

Establish an interval estimate around the sample mean : Find the standard error of the mean. Also establish an interval estimate around the sample mean using one standard deviation of the mean.
What is the opportunity cost of tammies trip : The cost of the concert ticket is $50. What is the opportunity cost of Tammie's trip to the concert and the monthly productivity of two workers is as follow: Alex 300 Pants & 100 bikes and Joel 100 pants & 50 bikes.
Calculate the mass of ice : Consider a glass of 262 mL of water at 28°C. Calculate the mass of ice at -15°C that must be added to cool the water to 10°C after thermal equilibrium is achieved.
Explain what is wrong when statistician survey voters : Next morning, he came to work at 8:00 and began to make calls. By 11:00 a.m., his survey was done. Don't discuss what is not said. Discuss what is wrong with what is said.
Stock value by using capital asset pricing model : An investor is looking to buy stock in Company XYZ. The earnings in the last year were $9.50 a share and expected to grow 3% a year for the upcoming 5 years. The current return on benchmark investments is 11%. Using the Capital Asset Pricing Model..
Determine the divisional and company net income : Determine the divisional and company net income if the transfer price is set at the market price. Determine the divisional and company net income if the transfer price is set at total cost. Determine the divisional and company net income if the trans..
Mass of limestone is required to remove the sulfur dioxide : what mass of limestone is required to remove all the sulfur dioxide formed by the combustion of 7.5 104 kg of coal that is 0.33 mass % sulfur?
Does this hurt the growth in the economy? : Assuming a company does not have enough excess retained earnings to fund future projects that have positive NPV's, they would have to sell debt or issue new capital. Issuing new capital is often thought of as a negative sign to current stock holders,..
General types of subsequent events : What are the general types of subsequent events that require Green's consideration and evaluation? What are the auditing procedures Green should consider performing to gather evidence concerning subsequent events?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determining the inventory turnover ratio

The following information was available for Bowyer Company at December 31, 2010: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Bowyer's inventory turnover ratio in 2010 was:

  Gain on sale of debt investements

Tolan co. purchased 30,6% irick company bonds for 60,000 cash plus brokerage fees of $600. Interest is payable seminannualy on july 1 and january 1. if 15 of the securities are sold on july 1 from $31,000 less $300 brokerage fees, the entry would ..

  Aging of receivables analysis

Paloma Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis

  Assumptions behind transactions and full journal entries

Explain to him the rules of debits and credits for the balance sheet and income statement - journal entry that would be recorded that impacts the balance sheet.

  What is the residual income

Ruger has a profit margin of 16% based on revenues of $400,000 and an investment turnover is 2. What is the residual income when the cost of capital is 10%?

  Formulate a lp model for specific problem

An ounce of oats contributes 8 milligrams of vitamin A and 1 milligram of vitamin B, whereas an ounce of rice contributes 6 milligrams of A and 2 milligrams of B. An ounce of oats costs $0.05, and an ounce of rice costs $0.03. Formulate a LP model..

  How controls can improve the overall efficiency

One function of the AIS (accounting information system)is to provide adequate controls to ensure the safety of orgnizational assets, including data. Many people, however, often view control procedures as "red tape." Discuss how controls can improv..

  Prepare adjusting entry and find balance in prepaid rent

Prepare the adjusting entry for December 31 st  to reflect the amount of rent expense consumed. What is balance in prepaid rent on December 31 st  after the adjusting entry has been made?

  Calculate jessie predetermined overhead rate

Jessie, Inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $7,500,000 and total direct labor hours to be 125,000 hours.

  Determining patent amortization

Rocky Corporation has made a commitment to purchase the patent from Granite for $200,000 at the end of five years. Compute Granite's patent amortization for 2009, assuming the straight-line method is used.

  Firm market value and book value per share

The company had 110,000 shares of stock outstanding which sold at a price of $56 per share. By how much did the firm's market value and book value per share differ?

  Problem regarding quarterly sales forecast

Adams Sporting Goods sells bicycles throughout the southeastern United States. The following data were taken from the most recent quarterly sales forecast:

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