Question1. You have a $2 million portfolio comprising a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.20. You are considering selling $100,000 worth of one stock with a beta of 0.80 and using the proceeds to buy another stock with a beta of 1.50. What will the portfolio's new beta be after these transactions?
Question2. The Moore Corporation had operating income (EBIT) of $950,000. The company's depreciation expenditure is $237,500. Moore is 100% equity financed, and it faces a 35% tax rate. What is company's net income? What is its net cash flow?
Question3.What will be the nominal rate of return on the perpetual preferred stock with the $100 par value, a stated dividend of 9% of par, and the current market price of (a) $52, (b) $86, (c) $96, and (d) $147?