• Q : Calculating portfolio betas....
    Finance Basics :

    You own a stock portfolio invested 25 percent in Stock Q, 20 percent in Stock R, 15 percent in Stock S, and 40 percent in Stock T. The betas for these four stocks

  • Q : Calculating returns and standard deviations....
    Finance Basics :

    Based on the following information, the expected return and standard deviation for Stock A are __percent and __percent, respectively. The expected return and standard deviation for Stock

  • Q : Problem about portfolio expected return....
    Finance Basics :

    You have $22,600 to invest in a stock portfolio. Your choices are Stock X with an expected return of 22 percent and Stock Y with an expected return of 14.1 percent.

  • Q : Positive and negative evidence....
    Finance Basics :

    Discuss some of the positive and negative evidence used to establish the need for a valuation allowance for a tax loss carry-forward. Also, indicate the effect of the valuation allowance on the free

  • Q : Net present value of project in us dollars....
    Finance Basics :

    Calculate the net present value of the project in U.S. dollars. The interest rate is about 8.3 percent in the Philippines and 3 percent in the United States. Exchange rates are

  • Q : Computing the returns and variability....
    Finance Basics :

    Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. (Do not include the percent signs (%).

  • Q : Determining the difference between the bond ytm and ytc....
    Finance Basics :

    Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels o

  • Q : Earnings per share over using regression analysis....
    Finance Basics :

    Using pro-forma income statements to estimate earnings per share over using regression analysis has several advantages except which one of the following?

  • Q : Problem on investment returns....
    Finance Basics :

    You bought one of Great White Shark Repellant Co.'s 8 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature six years from now

  • Q : Computing the real returns and risk premiums....
    Finance Basics :

    You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent, -12 percent, 11 percent, 38 percent, and 14 percent.

  • Q : Finding bond price from apr....
    Finance Basics :

    Suppose a ten year ,1000 bond with an 8.9% coupon rate and semiannual coupons is trading for a price of $1034.52. If the bond's yeild to maturity changes to 9.4% APR, what will the bond's price be?

  • Q : Compute the cost of new common stock....
    Finance Basics :

    Expected cash divends are $2.50, the dividend yield is 7%, flotation cost are 5%, and growth rate is 3%. Compute the cost of new common stock.

  • Q : Estimating the expected value of outcomes....
    Finance Basics :

    A project has the following projected outcomes in dollars: $250, $350, and $500. The probabilities of their outcomes are 25%, 50%, nad 25% respectively. What is the expected value of these outcome

  • Q : Determining the maximum debt-to-equity ratio....
    Finance Basics :

    An investment is available that pays a tax-free 4%. The corporate tax rate is 50%. Total corporate income before earnings and taxes (EBIT) is $224 million forever. What is the maximum debt-to-equity

  • Q : Estimating the purchasing power parity....
    Finance Basics :

    In the spot market 7.8 Mexican pesos can be exchange for 1 U.S. dollar. A compact disc costs $15 in the United States. If purchasing power parity (PPP) hold, what should be the price of the same dis

  • Q : Principles of finance-contrast net income and cash flows....
    Finance Basics :

    Explain principles of finance and how they relate to Omega Health Foundation's financial position. Compare and contrast net income and cash flows.

  • Q : Ear for investment choice....
    Finance Basics :

    You have found three investments choices for a one-year deposit: 10% APR compounded monthly, 10% APR compounded annually, and 9% APR compounded daily. Compute the EAR for each investment choice. (A

  • Q : Claculate yield to maturity on bond....
    Finance Basics :

    A bond has 14 years left to maturity. It pays $40 semi-annual coupon and a par value of $1,000. The bond is callable in 5 years at a call price of $1050. The price of the bond is $1,075 as of today

  • Q : Determining the value of a corporate bond....
    Finance Basics :

    What is the value of a corporate bond that has a par value of $1,000, an original maturity of 20 years, a coupon rate of 7% (pays interest annually), was issued two years ago, if bonds of similar ch

  • Q : Bond features on the coupon rate of the bond....
    Finance Basics :

    You are Kim's assistant, and she has asked you to prepare a memo to Chris describing the effect of each of the following bond features on the coupon rate of the bond. She would also like you to list

  • Q : Evaluating current price of the stock....
    Finance Basics :

    Sankey, Inc., is a fast growth stock and expects to grow at an annual rate of 35 percent for the next three years. It then will settle to a constant-growth rate of 10 percent. The first dividend wil

  • Q : Decision-making and cash flow data....
    Finance Basics :

    Compute IRR, NPV, and payback for both projects. Show all calculations. Based on your analysis, would you recommend the management to go ahead with Project A? Why or why not?

  • Q : Calculating the financial break-even point....
    Finance Basics :

    As a shareholder of a firm that is contemplating a new project, explain which you would be more concerned with: the accounting break-even point, the cash break-even (the point at which operating cas

  • Q : Weighted average cost of capital-wayco industrial supply....
    Finance Basics :

    Wayco Industrial Supply has a pre-tax cost of debt of 7.6 percent, a cost of equity of 14.3 percent, and a cost of preferred stock of 8.5 percent. The firm has 220,000 shares of common stock outstan

  • Q : Calculating the present value of the offer....
    Finance Basics :

    His salary will grow at 3.5 percent each year. Each year he will receive a bonus equal to 10 percent of his salary. Mr. Adams is expected to work for 25 years. What is the present value of the offer

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