Compute the rate of return


1) The stock of Trudeau Corporation went from $27 to $45 last year. The firm also paid $2 in dividends during the year. Compute the rate of return. 2) Given the following financial data, compute the return on assets and return on equity: net income/sales = 8%, sales/total assets = 2.5X, and debt/total assets = 15%. 3) What is the approximate yield to maturity of an 8% coupon bond with a par value of $1,000? The bond is currently selling for $920 and has 5 years to maturity. 4) A convertible bond has a face value of $1,000 and the conversion price is $60 per share. The stock is selling at $25 per share. The bond pays $85 per year in interest and is selling in the market for $945. It matures in 7 years. Market rates are 10% annually. (I) What is the conversion ratio? (II) What is the conversion value? 5) If a $100,000 Treasury bond futures contract changes by 15/32, what is the dollar change? 6) A mutual fund is set up to charge a load. Its net asset value is $17.70 and its offer price is $18.60. What is the dollar value of the load (commission)? 7) A shopping center has an annual net operating income of $1,050,000 and a capitalization rate of 8%. What is its value? 8) An investment has the following range of outcomes and probabilities. Outcomes (Percent) Probabilities of Outcomes 5% .30 7% .25 12% .45 Calculate the expected value and the standard deviation (round to two places after the decimal point where necessary).

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Finance Basics: Compute the rate of return
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