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Intermountain Resources is a multidivisional company. It has three divisions with the following betas and proportion of the firm's total assets:
The risk-free rate is 7 percent and the market risk premium is 8 percent.
a. What is the firm's weighted average beta?
b. What required equity rate of return should the firm use for average-risk projects in its natural gas pipeline division?
c. What required equity rate of return should the firm use for average-risk projects in its oil and gas exploration division?
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The present value of $81,189 to be received in 16 years at 8.3% is how much? For an annuity in arrears, what annual payment is required to accumulate $662,399 in 8 years at an interest rate of 10.44? To stay "even" (same purchasing power) with inflat..
Dane purchased 3000 shares of a mutual fund at an offer price of $6.03 per share. Later, he sold the investment for $3.64 per share. During the time Dane owned the shares, the fund paid a dividend of $0.52 per share. What was his return on investment..
You have three assets X, Y and Z with expected returns of 10%, 15% and 20%, respectively. The weights of the first two assets are 50% and 70% respectively. Calculate the expected return and the variance of your portfolio
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