What is expected return on portfolio

Assignment Help Financial Management
Reference no: EM131323901

You own a portfolio that has $2,750 invested in Stock A and $3,900 invested in Stock B. If the expected returns on these stocks are 9% and 14%, respectively, what is the expected return on the portfolio?

Reference no: EM131323901

Questions Cloud

Calculate the value of the firm and the firm equity : The MoMi Corporation's income before interest, depreciation and taxes, was $2.9 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 17% of pre..
What are portfolio weights of each stock : If you own 200 shares of Alaska Air at $44.08, 250 shares of Best Buy at $52.52, and 100 shares of Ford Motor at $8.56, what are the portfolio weights of each stock?
Calculate the annual depreciation allowances : A piece of newly purchased industrial equipment costs $972,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in Table 10.7. Calculate the annual depreciation allowances and end-of-the-year book values ..
What is the dollar spread for this bill : A Treasury bill has a bid yield of 3.62% and an ask yield of 3.56%. The bill matures in 206 days. Assume a face value of $1,000. What is the dollar spread for this bill? You own a stock portfolio invested 15 percent in Stock Q, 25 percent in Stock R,..
What is expected return on portfolio : You own a portfolio that has $2,750 invested in Stock A and $3,900 invested in Stock B. If the expected returns on these stocks are 9% and 14%, respectively, what is the expected return on the portfolio?
Expected inflation increases : If expected inflation increases, interest rates are likely to increase. Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy, hence the riskiness of all debt securities. The fo..
What was your total return for last year : You bought a share of 5.5 percent preferred stock for $104.18 last year. The market price for your stock is now $102.67. What was your total return for last year?
Calculate present value of interest tax shields generated : You are a first-year analyst at Bayou Capital. You have been tasked with calculating the present value of all interest tax shields that will be generated in the firm’s latest leveraged buyout. The LBO target will have the following amounts of debt ou..
Time line is not meaningful unless cash flows occur annually : Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $50,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7%. How much would it cost h..

Reviews

Write a Review

Financial Management Questions & Answers

  Find the npv of project using wacc as your discount rate

A firm has decided to replace a major piece of industrial equipment. The equipment costs $690,000 to purchase and install and is expected to have a useful life of 5 years, after which it will be sold on the open market and is expected to have a salva..

  What is the stock price of CFS

Goode Investment Bank agrees to underwrite 1,000,000 CFS Company’s shares on a best efforts basis. It then sells 800,000 shares to the public for $20 each. The agreement is that Goode will charge 1.50 per share sold. d. What is the stock price of CFS..

  Change in dividend than with actual amount of dividend

Dividends tend to fluctuate in direct relation to changes in annual earnings. Managers are less concerned with the change in the dividend than with the actual amount of the dividend. Managers tend to avoid smooth dividends as they don't signal the fi..

  What is the value of this twenty five year lease

What is the value of this 25 year lease? The first payment, due one year from today is $2,000 and each annual payment will increase by 5%. The discount rate used to evaluate similar leases is 7.5%.

  What is the free cash flow for talker corp and mobiletalk

You are an industry analyst for the telecom sector. You are analyzing financial reports from two companies. Talker Corp. and MobileTalk, Inc. Corporate tax for both firms is 35%. What is the FREE CASH FLOW for Talker Corp? and What is the FREE CASH F..

  Outstanding mortgage balance at the lower rate

Assume a 25-year, $490,000 mortgage with a rate of 7.2 percent. 9 years into the mortgage, rates have fallen to 6.2 percent. What would be the monthly saving to a homeowner from refinancing the outstanding mortgage balance at the lower rate?

  The opportunity cost of capital for average risk project

Most investments involve a certain level of risk. Risk can affect the return on an asset or a portfolio. Measuring risk will help determine the expected return on an investment. Discuss the concept of risk and how it is measured. Explain how a financ..

  Bonds are selling at par value-what is the cost of equity

Johnson Tire Distributors has an unlevered cost of capital of 12 %, a tax rate of 34 %, and expected earnings before interest and taxes of $1,600. The company has $2,700 in bonds outstanding that have a 7 % coupon and pay interest annually. The bonds..

  Theoretical model of the optimal capital structure

With respect to capital structure, the firm’s. mix of debt and equity, explain Modigliani and Miller’s theoretical model of the optimal capital structure, detailing why a firm’s investing decision and financing decision are inseparable.

  Bond valuation and changes in maturity and required returns

Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate and semi annual interest payments. Two years after the bonds were issued the going rate of interest on bonds such as these fell to 6%...

  Dividends are expected to grow

Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 30 percent per year during the next three years, 20 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 11 percen..

  Weighted average cost of capital after recapitalization

Cops & Co. expects its EBIT to be $60,000 every year forever. Cops currently has no debt and its cost of equity is 22 percent. The firm is considering issuing new par bonds and uses the proceeds of the new debt to repurchase equity. The firm can borr..

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