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CAPM In the capital asset pricing model (CAPM), a security's expected return is
Security Risk The systematic risk principle has an important implication, which is that
Selected condensed data taken from a recent balance sheet of Perkins Inc. are as follows.
The Cole Co. has a return on equity of 13.5 percent, adebt-equity ratio of .8, and a total asset turnover of 1.9. What is the return on assets?
Find the value of a bond maturing in 6 years, with a $1,000 par value and a coupon interest rate of 10% (5% paid semiannually) if the required return on similar-risk bonds is 14% annual interest (7
What is the holding rate of return for a 20 year investment which earns 5%/year each year? What would a $200 investment grow to?
Financial statements are based on generally accepted accounting principles (GAAP) and are audited by CPA firms. Therefore, do investors need to worry about the validity of those statements?
What is the opportunity cost of capital for an average-risk Whispering Pines investment?
A buyer, with a yearly gross income of $45,000, is considering a property with annual taxes of $1,450. What is the maximum principal and interest payment permitted with a GDS ratio of 30%?
If a "typical" firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without having any qualms about what they were doing?&nb
A specialized automatic machine costs $300,000 and is expected to save $111,837.50 per year while in operation. Using a 12% interst rate, what is the conventional payback period?
What is the present value of a bond that pays $340 one year from now and $5340 two years from now at a constant interest rate of 6.8%?
Mean and standard deviation of 100 items are found to be 40 and 10 . If at the the time of calculation two items are wrongly taken as 30 and 70 instead of 3 and 127, find the correct mean and stand
Creative Solutions, Inc. has a successful brand with the name Top Goal. The market size in which Top Goal competes is $2 billion, and Top Goal has generated sales of $150 million.
SDJ, Inc., has net working capital of $1,370, current liabilities of $3,720, and inventory of $1,950. What is the current ratio?
Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year's dividend is $10 and the market capitalization rate is 8%, what is the current stock price?
With interest at 8% compounded annually, how much money is required today to provide a perpetual income of $14,316 per year?
The company's depreciation expense is $285,000. Moore's 100% equity financed, and it faces a 35 percent tax rate. What is the net income and the net cash flows?
Pharmecology is about to pay a dividend of $1.35 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 2.75% per year.
Suppose that you hold a share of stock and a put option on that share. What is the payoff when the option expires if (a) the stock price is below the exercise price?
What is the present value of $1,000 to be received at the end of two years? Three years? What can you conclude about the effect of time until receipt on the present value of future cash inflows?
What can you conclude about the effect of the rate of return on the present value of cash to be received in the future?
If you borrow $3,000 at 6% simple interest per year for 7 years, how much will you have to repay at the end of 7 years?
Your company's offer is for $3,000,000 in cash upon signing the agreement followed by 10 annual payments of $300,000 starting 1 year later. The time value of money is 10%. What is the
A firm's bonds have amaturity of 10 years with a $1,000 face value. What are their nominal yield to maturity and their nominal yield to call?