Reference no: EM131315964
1. Your investment club has only two stocks in its portfolio; $35,000 is invested in a stock with a beta of 0.4, and $45,000 is invested in a stock with a beta of 1.3. What is the portfolio's beta? Round your answer to two decimal places.
2. AA Industries's stock has a beta of 1.9. The risk-free rate is 6%, and the expected return on the market is 11%. What is the required rate of return on AA's stock? Round your answer to two decimal places.
3. Assume that the risk-free rate is 4% and that the market risk premium is 4%. What is the required rate of return on a stock with a beta of 1.2? Round your answer to two decimal places. % What is the required rate of return on a stock with a beta of 0.5? Round your answer to two decimal places. % What is the required return on the market? Round your answer to two decimal places. %
4. Suppose you manage a $4.455 million fund that consists of four stocks with the following investments: Stock Investment Beta A $420,000 1.50 B 325,000 -0.50 C 1,260,000 1.25 D 2,450,000 0.75 If the market's required rate of return is 13% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
5. Thress Industries just paid a dividend of $2.25 a share (i.e., D0 = $2.25). The dividend is expected to grow 5% a year for the next 3 years and then 12% a year thereafter. What is the expected dividend per share for each of the next 5 years? Round your answers to the nearest cent. D1 = $ D2 = $ D3 = $ D4 = $ D5 = $
6. Boehm Incorporated is expected to pay a $3.60 per share dividend at the end of this year (i.e., D1 = $3.60). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 17%. What is the value per share of Boehm's stock? Round your answer to the nearest cent. '
7. Nick's Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $3 at the end of each year. The preferred sells for $30 a share. What is the stock's required rate of return (assume the market is in equilibrium with the required return equal to the expected return)? Round the answer to two decimal places.
8. A company currently pays a dividend of $1 per share (D0 = $1). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, then at a constant rate of 6% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 6%, and the market risk premium is 5%. What is your estimate of the stock's current price? Round your answer to the nearest cent
9. Current and projected free cash flows for Radell Global Operations are shown below. Actual 2013 2014 Projected 2015 2016 Free cash flow $608.40 $669.08 $709.13 $765.86 (millions of dollars) Growth is expected to be constant after 2015, and the weighted average cost of capital is 10.05%. What is the horizon (continuing) value at 2016 if growth from 2015 remains constant? Round your answer to the nearest dollar. Round intermediate calculations to two decimal places.
10. Crisp Cookware's common stock is expected to pay a dividend of $2 a share at the end of this year (D1 = $2.00); its beta is 0.90; the risk-free rate is 5.2%; and the market risk premium is 6%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $25 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is )? Do not round intermediate steps. Round your answer to the nearest cent.
11. What is the required rate of return on a preferred stock with a $50 par value, a stated dividend of 10% of par, and a current market price of (a) $51, (b) $83, (c) $119, and (d) $148 (assume the market is in equilibrium with the required return equal to the expected return)? Round the answers to two decimal places. % % % %
Generate code for the given three address statements
: Generate code for the following three-address statements again assuming stack allocation and assuming a and b are arrays whose elements are 4-byte values.
|
What is the accounting break-even quantity
: A project has the following estimated data: price = $59 per unit; variable costs = $31.86 per unit; fixed costs = $7,200; required return = 14 percent; initial investment = $11,000; life = three years. Ignore the effect of taxes. What is the accounti..
|
What industry sectors might emerge as the new drivers
: Policymakers in Japan, the world's third-largest economy, must transition their nation away from a manufacturing-dependent model for growth. What industry sectors might emerge as the new drivers of economic growth
|
Write expression for the ka for reaction of carbonic acid
: Write expression for Ka for the reaction of carbonic acid with water. If the patient's pH is 7.30, calculate [H3O+]. How many mL of a 0.175M solution of NaOH (aq) will react with 150.0 mL of a 0.158 M H3PO4 (aq) solution?
|
What is the portfolio beta-what is required rate of return
: Your investment club has only two stocks in its portfolio; $35,000 is invested in a stock with a beta of 0.4, and $45,000 is invested in a stock with a beta of 1.3. What is the portfolio's beta? AA Industries's stock has a beta of 1.9. The risk-free ..
|
Use pure expectations hypothesis
: The following table shows the price of $1000 face value 1-year, 2-year, 3-year, 9-year and 10-year US Treasury zero coupon bonds as of Oct. 17, 2016. Use pure expectations hypothesis to determine: Based on you calculations in part (A), what is the bo..
|
Calculate the osmolarity of a solution made
: Calculate the osmolarity of a solution made from a 1.876 % (m / v) solution of KBr dissolved in water. What is the freezing point in degrees C of a 1.79 molar potassium chloride solution?
|
Consider their life stage and the risk and return trade-off
: Pam is 43, her husband Josh is 45. They have three children ages: 16,14 and 11. Their monthly income is $4,900, Their monthly living expenses are $4,450. They have an emergency fund fo $5,000. Their total assets are $262,700, their total liabilities ..
|
Develop a marketing strategy for your packaged ice
: Develop a marketing strategy for your packaged ice that includes a market penetration strategy, market development strategy, and the value proposition
|