Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Active Tutors
Asked Questions
Answered Questions
The returns on XYZ Corp. over the last four years are 10%, 12%, 3%, and -9%. What is the historical average return over the last four years?
Suppose you decide to sell your bonds today, when the required return on the bonds is 10%. If the inflation rate was 4.2% over the past year, what would be your total real return on investment?
Explain the interactions among market efficiency, capital budgeting, and the cost of capital. Give two examples of anomalies in the financial markets.
Wellington Boots Ltd is an all equity-financed firm that has $5 400 000 of equity finance consisting of 3 000 000 ordinary shares outstanding.
If the expected T-Bill rate is 5% and the expected inflation rate is 2.50%, what are the approximate and exact expected real risk premiums on the portfolio?
If EBIT is $5 million, which plan will result in the higher EPS? What is the break-even EBIT?
Margaret River Wines (MRW) has a project available that will provide after-tax cash flows of $215 000 for the next eight years.
Fiji Light Industries shares have a beta of 1.2. The company has just paid a dividend of $0.80, and the dividends are expected to grow at 6%. Calculate the cost of equity using the dividend growth mo
You own a share portfolio invested 25% in shares of Q, 20% in shares in R, 45% in shares in S and 10% in shares in T.
Bommer Ltd has just paid a dividend of $2.40 per share on its ordinary shares. The company is expected to maintain a constant 6% growth rate in its dividends indefinitely. If the share price is $48
You have $100 000 to invest in a portfolio containing Share X, and Share Y. Your goal is to create a portfolio that has an expected return of 18.5%.
Money Penny Bank has an issue of preference shares with a fixed dividend of $6 that just sold for $94. What is the bank's cost of preference shares?
Shares in Kelpie Industries have a beta of 0.9. The market risk premium is 8%, and short-term government bonds are currently yielding 4.5%.
Star Jet Ltd's ordinary shares have a beta of 1.3. If the risk-free rate is 5% and the expected return on the market is 13%, what is Star Jet's cost of equity capital?
Fama's Llamas has a WACC of 10.5%. The company's cost of equity is 14% and its cost of debt is 8%. The tax rate is 30%. What is Fama's target debt-equity ratio? (Assume a classical tax system.)
You have $250 000 to invest in a share portfolio. Your choices are shares in Homestead Ltd, with an expected return of 16%, and shares in Limestone Ltd, with an expected return of 9.5%.
Dingo Ltd shares have a beta of 1.5 and an expected return of 16%. Shares in White Shark Ltd have a beta of 0.70 and an expected return of 11.5%.
A portfolio is invested 20% in House, 40% in Door and 40% in Window. The expected returns on these investments are 9%, 17% and 23%, respectively. What is the portfolio's expected return?
Share J has a beta of 1.35 and an expected return of 17%, while Share K has a beta of 0.8 and an expected return of 10%. You want a portfolio with the same risk as the market.
Why is liquidity important in analysis of financial statements? Explain its importance from the viewpoint of more than one type of user.
What is the justification for including prepaid expenses in current assets?
What is the current ratio? What does the current ratio measure? What are reasons for using the current ratio for analysis?
Certain industries are subject to peculiar financing and operating conditions calling for special consideration in drawing distinctions between current and noncurrent. How should analysis recognize
If she gets an MBA, her salary will be a constant $100,000 per year. What is the net present value (NPV) of her decision if Vivian decides to do an MBA?
The rate on 6-month T-bills is 2%, and the return on the S&P 500 index is 15%. What is the appropriate cost for retained earnings in determining the firm's cost of capital?