What is its required return

Assignment Help Financial Management
Reference no: EM13918482

1. You have a portfolio with a beta of 1.35. What will be the new portfolio beta if you keep 85 percent of your money in the old portfolio and 15 percent in a stock with a beta of 0.78? (Round your answer to 2 decimal places.)

2. Paccar’s current stock price is $48.20 and it is likely to pay a $0.80 dividend next year. Since analysts estimate Paccar will have an 8.8 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)

Reference no: EM13918482

Questions Cloud

Effect on net income : What is the effect on net income if sales is increased by 1500 units.
Which type of cost system-process or job order : Which type of cost system, process or job order, would be best suited for each of the following: (a) TV assembler, (b) building contractor, (c) automobile repair shop, (d) paper manufacturer, (e) custom jewelry manufacturer? Give reasons for your ans..
Discussing the possibility of major project for real estate : In establishing the need for marketing research, which of the following would serve as a good decision rule for managers?
Application of an anthropological perspective : The education system in America has taken a turn for the worst in most cases. The emphasis on the value of education itself has somehow taken a back seat to fame and fortune of an educated or uneducated person.
What is its required return : You have a portfolio with a beta of 1.35. What will be the new portfolio beta if you keep 85 percent of your money in the old portfolio and 15 percent in a stock with a beta of 0.78? Paccar’s current stock price is $48.20 and it is likely to pay a $0..
Cultural universals effect on humanism : When we identify the cultural universals of the people that have a greater impact on our existence it gives us an understanding and a greater appreciation for the value of our being.
Explain how the literature review will be organized : Discuss the current status of the topic. Organize this section according to the previously mentioned themes or something similar. Discuss relationships that may exist in the literature.
Develop a three-week moving average for the time series : Develop a three-week moving average for this time series. Compute MSE and a fore- cast for week 7. Use a = 0.2 to compute the exponential smoothing values for the time series. Com- pute MSE and a forecast for week 7.
How long will it take for the account to be paid off : One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per month. You will charge 1.45 percent per month interest on the overdue balance. If the current balance is $13,500, how long..

Reviews

Write a Review

Financial Management Questions & Answers

  Non constant growth valuation

A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 21% per year for the next 2 years, then at a constant rate of 7% thereafter. The company's stock has a beta of 0.9, the ..

  First annual payment will be principal reduction

You take out a $800,000 amortized loan for your new beach house. You will make equal annual payments at the end of each of the next 10 years. The interest rate is 8%. How much of the first annual payment will be principal reduction?

  Description of two possible hedging approaches

For a U.K. firm to hedge a ?100,000 payable using options, there are two possible ways the firm can approach this. Can you please provide a description of each of the two possible hedging approaches?

  Parallel shift in the corporate debt term structure

In December 1995 Boise Cascade’s stock had a beta of 0.95.The Treasury bill rate at the time was 5.8% and the Treasury bond rate was 6.4% The firm had debt outstanding of $1.7 billion and a market value of equity of $1.5 billion; Assume Boise Cascade..

  Perpetual rate-what is the most you would pay per share

The dividend for Should I, Inc., is currently $1.50 per share. It is expected to grow at 16 percent next year and then decline linearly to a 4 percent perpetual rate beginning in four years. If you require a 12 percent return on the stock, what is th..

  First three years goes toward the repayment of principal

You have a 30-year mortgage with a simple annual interest rate of 8.5 percent. The monthly payment is $1,000. What percentage of your total payments over the first three years goes toward the repayment of principal?

  A leader in your firm has been studying the foreign

a leader in your firm has been studying the foreign exchange market for a number of years and believes that she can

  What is the expected return on this stock

Sugar and Spice stock is expected to produce the following returns given the various states of the economy. What is the expected return on this stock?

  Annualized return on investment

Suppose you buy stock at a price of $83 per share. Three months later, you sell it for $89. You also received a dividend of $.38 per share. What is your annualized return on this investment?

  What are possible solutions to these harms

What if anything should be done about discrimination in private businesses? As far as serving people? And employing people? What are possible solutions to these harms?

  What is the projects payback

Project K costs $50,000, its expected cash inflows are $15,000 per year for 10 years, and its WACC is 9%. What is the project's payback?

  What factors have contributed to the rapid growth

What factors have contributed to the rapid growth in the CDS market and Describe two strategies the company can use to hedge itself against defaults.

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