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What are the arithmetic and geometric average returns for a stock with annual returns of 21%, 8%, -32%, 41%, and 5%?
List and explain the points of financial impact on a company if it raises the credit standards required of its customers who utilized trade credit offered by the company.
Explain why the present value of a cash flow stream, and the asset associated therewith; fluctuate in value with the level of interest rates in the capital markets.
If your portfolio is invested 30 percent each in A and B and 40 percent in C, what is the portfolio expected return? The variance? The standard deviation?
Suppose a stock had an initial price of $83 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $76. Compute the dividend yield, the capital gains yield a
Suppose that today you buy a 12 percent annual coupon bond for $1,364.87. The bond has 17 years to maturity. You expect to earn a rate of 7.99 percent on your investment.two years from now, the YTM
What is the expected rate of return on his portfolio, if the risk rate is 7 per cent and the expected return on the market portfolio is 16 per cent?
An investor is looking to buy stock in Company XYZ. The earnings in the last year were $9.50 a share and expected to grow 3% a year for the upcoming 5 years. The current return on benchmark investme
Draw the decision Tree and Derive Optimal decision. Compute Expected Value of Perfect Information. Compute expected Value of Sample Information
Over-utilization of jointly-owned property is a common estate planning mistake for all of the following reasons except:
Axel Teleommunications has a target capital structure that consists of 70% debt and 30% equity. the company anticipates that its capital budget for the upcoming year will be $3000000.
The tax rate is 40 percent. Due to the extremely competitive and, therefore, risky nature of the golf club business the cost of capital is estimated to be 16 percent. Calculate the payback period, t
Suppose Yon Sun Corporation's free cash flow during the just-ended year (t = 0) was $100 million, and FCF is expected to grow at a constant rate of 5% in the future. If the weighted average cost of
The company's capital structure consists of debt and common stock. Given the above constraints, what portion of the capital budget will be funded with debt?
Calculate project Alpha's Net Present Value (NPV), assuming your firm's required rate of return is 10%.
What is the average stock market reaction to: (a) a dividend initiation; (b) a dividend increase; (c) a dividend termination; and (d) a dividend decrease [cut]? Are these reactions logically consist
Compute the realised rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price.
What is the current PE ratio for each company? Pacific Energy Company has a new project that will generate additional earnings of $100,000 each year in perpetuity. Calculate the new PE ratio of the
Suppose the closing stock prices for 10 consecutive trading days are $20.00, $20.10, $19.90, $20.00, $20.50, $20.25, $20.90, $20.90, $20.90, $20.75. Estimate the volatility of the stock per annum.
The company has a profit margin of 9 percent and pays out 30 percent of profits in dividends. How much external financing will be necessary? Assume there is no increase in liabilities other than tha
A loan for $500,000 is negotiated, for an annual rate of 11%, and a 15-year term with monthly payments. A payment in the amount of $5,500 is negotiated. What type of amortization loan is this?
What is the bond's yield to maturity? What is its yield to call? What is its yield to worst?
ABC's analysts project that the merger will result in incremental free flows and interest tax savings with a combined present value of $72.52 million, and they have determined that the appropriate d
Crosby Industries has a debt-equity ratio of 1.5. Its WACC is 9 percent, and its cost of debt is 6 percent. There is no corporate tax. What is Crosby's cost of equity capital?
General Motors has a weighted average cost of capital of 9%. GM is considering investing in a new plant that will save the company $25 million over each of the first two years, and then $10 million