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Chuck, a dentist, raises prize rabbits for breeding and showing purposes. Assume that the activity is determined to be a hobby. During the year the activity generates the following items of income and expense:
Item AmountSale of rabbits for breeding stock $800Prizes and awards 300Property taxes on rabbit hutches 200Feed 600Veterinary fees 500Depreciation on rabbit hutches 250
Required:
a. What is the total amount of deductions Chuck may take during the year with respect to the rabbit raising activity?
b. Identify which expenses may be deducted and indicate whether they are deductions for or from AGI.
c. By what amount is the cost basis of the rabbit hutches to be reduced for the year?
What is the weighted average beta of a portfolio with $75,000 invested in Company A with a beta of 1.35, $125,000 invested in Company B which has a beta of 1.8, $25,000 in Company C with a beta of .65, and $85,000 in Company D which has a beta of ..
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Calculate the abnormal rates of return for the five stocks in Problem first suppose the following systematic risk measures:
The management wants the company to grow. Rather than pay out all of the firm's earnings as a dividend this year (t = 0), the management wants to plow back 60 percent of the earnings into the business.
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