What would you guess was the rate of return

Assignment Help Finance Basics

Reference no: EM131118198

The monthly of return on t-bills is 1%. The market went up this month by 1.5%. In addition, AmbChaser,Inc., which has an equity beta of 2, surprisingly just won a lawsuit that awards it $1 million immediately.

a. If the original value of AmbChaser equity were $100million, what would you guess was the rate of return of its stock this month?

b. What is your answer to (a) if the market had expected AmbChaser to win $2 million?

Reference no: EM131118198

Questions Cloud

Dorsett company offered to exchange a similar machine plus : Dorsett Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.)

What is the immediate dilution potential for this new stock : What is the immediate dilution potential for this new stock issue? If the stock has a P/E ratio of 23 immediately after the offering, what will the stock price be? Should the founding stockholders be pleased with the $40 they receive for their share..

Compute the weighted average accumulated expenditures : Compute the weighted-average accumulated expenditures on Laserwords' new building during the capitalization period.

Interest during construction grieg landscaping began : Interest during Construction Grieg Landscaping began construction of a new plant on December 1, 2010. On this date the company purchased a parcel of land for $139,000 in cash.

What would you guess was the rate of return : If the original value of AmbChaser equity were $100million, what would you guess was the rate of return of its stock this month? What is your answer to (a) if the market had expected AmbChaser to win $2 million?

Prepare a schedule that discloses the individual costs : Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site number 101 as of September 30, 2011.

What is the abnormal change in ford stock price : If the market index sub sequently rises by 8% and Ford's stock price rises by 7%, what is the abnormal change in Ford's stock price?

How these items would be reported on the income statement : On November 3, the automobile was sold to Jared Winger, a stockholder. how these items would be reported on the income statement of Hollerith Co.(AICPA adapted)

If the economy has only one factor : Assume that both portfolios a and b are well diversified? that E(rA)=12% and E(rB)=9%. If the economy has only one factor and beta=1.2 whereas beta=.8, what must be the risk-free rate?

User Account

All Pages