1. XYZ Company purchased a warehouse in April 2015 for a total of $34 million. It is estimated that the building and land worth about the same.
a. How much depreciation XYZ Company can declare for the warehouse in 2015?
b. If XYZ Company sold the warehouse in December 2016 for $33.5 million, how much capital gain/loss could they declare? (Hint: Half-month convention also applies to the month of disposal.)
1. a) The Boeing Company (BA) stock currently (2018) pays $1.71 per share quarterly dividend (the dividend was $0.42 per share in 2009). Assuming constant growth, what is the growth rate on the BA stock dividend?
b. Find the beta for BA stock, and the current interest rate on 6-month T-bill.
c. For the past 5 years, the Dow Jones Industrial Average went from 13,981.76 (02/15/2013) to 25,219.38 (02/16/2018). Assume it represents the expected return for the market portfolio, calculated the required return for BA stock based on CAPM?
d. Based the closing price of BA stock on 02/16/2018, what is the yield of BA stock? Is this stock over-priced or underpriced?