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What are the portfolio weights for a portfolio that has 145 shares of stock A that sells for $45 per share and 110 shares of Stock B that sells for $27 per share?
A stock has a beta of 1.05, the expected return on the market is 10% and the risk-free rate is 3.8%. What must the expected return on the stock be?
Here are data on $1,000 par value bonds issued by Micorsoft, Ford, and Xerox at the end of 2008. Assume you are thinking about buying these bonds as of January 2009. Answer the following questions:
A stock has a beta of 1.25 and an expected return of 14%. A risk free asset currently earns 2.1%.
Of the six key methods used to evaluate capital projects, which one do you prefer? Why do you prefer this method over others? What is your second choice for an evaluation method?
A retirement plan guarantees to pay you or your estate a fixed amount for 25 years. At the time of retirement you will have $100,000 to your credit in the plan.
A firm has debt with a face value of $100. Its projects will pay a safe $80 tomorrow. Managers care only about shareholders. A new quickie project comes along that costs $20, earns either $10 or $40 w
If the P/E ratio on the S&P 500 is 10, given historical earnings growth patterns, what would be a reasonable estimate of long-run future expected rates of return on the stock market?
Maynard Steel plans to pay a dividend of $3 this year. The company has an expected earnings growth rate of 4% per year and an equity cost of capital of 10%.
You notice that PepsiCo (PEP) has a stock price of $72.62 and EPS of $3.80. Its competitor, the Coca-Cola Company (KO), has EPS of $1.89.
Polk Products is considering an investment project with the following cash flows: Initial investment -$100,000 Yr 1 40,000 Yr 2 90,000 Yr 3 30,000 Yr 4 60,000.
Growth is expected to be constant after 2015, and the weighted average cost of capital is 11.1%. What is the horizon (continuing) value at 2016 if growth from 2015 remains constant?
Consider a firm with 80 shareholders, including yourself, who each owns 1 share worth $10. In addition, I own 20 shares and I am trying to fire the management.
Based on the following information, calculate the required return based on the CAPM; Based on the following information calculate the holding period return:
As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industries's stock as market conditions change. Suppose rRF = 5%, rM = 9%, and bUTI = 1.7.
I need help with providing a brief description of Amazon.com, its main business and operational activities and a short synopsis of the main developments of the company over the past few years.
You are asked to prepare a financial forecast for Joan Roberts, the Managing Director and owner of a retail fashion line, whose market share and profits have been steadily dropping over the last two y
Assuming the market weight are also the target weights for Foe Corp. please calculate the weights that should be used to find the weighted average cost of capital for Foe Corp.
This is based on another real situation. A company was looking at developing a high throughput urinalysis device for central laboratory hospital settings. The company had only a minor presence i
The December Treasury bond futures contract has a quoted price of 95'18 and the implied interest rate is 3.2% (semiannual). If annual interest rates go up by 1.00 percentage point,
A project that provides annual cash flows of $17,300 for nine years costs $79,000 today. Is this a good project if the required return is 8 percent? What if it's 20 percent?
What is your recommendation for American Express to increase its profitability? I need to take into account possible future changes in the regulatory framework, macroeconomic conditions, and bank's co
Your firm would like to evaluate a proposed new operating division. You have forecasted cash flows for this division for the next five years, and have estimated that the cost of capital is 12%.
One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $150,
You need a new car and the dealer has offered you a price of $20,000, with the following payment options: