Please solve for only d) Question 19A company is planning to invest in a stock with the following samples of stock price history forKKL and MPC.KKL closingstock priceMPC closingstock price45.688DateKKL DividendMPC DividendDec 0060.93848.20Jan 01Feb 01Mar 01Apr 01May 01Jun 01Jul 01Aug 01Sep 01Oct 01Nov 0158.0042.5053.0343.1047.1049.2945.160.180.0446.1947.400.1847.240.0445.0044.6050.3748.6745.950.0446.850.1838.3747.8838.2346.960.1846.650.05Dec 0147.1551.01The market returns for the twelve months are given below;DateMarket ReturnsJan 01Feb 016.94%-9.87Mar 014.86Apr 01May 01Jun 01Jul 01Aug 01Sep 01Oct 016.62-7.648.96-4.451.984.76-8.93Nov 01-2.55Dec 015.1a) Calculate the risk associated with investing in these stocks.b) Calculate the correlation coefficient between the two stocksc) Calculate the beta associated with each of these stocksd) Explain the betas of the two stocks

Beta is a measure of volatility of an asset. It is used as a measure which evaluates the…

Answered: beta associated with eac d) Explain the…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 5P

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Q2) Calculate Expected return and standard deviation of returns if the investor purchases the stock at $290 Event Probability Share Price Dividend A .10 330 4 B .15 320 3 C .30 300 3 D .20 290 4 E .25 280 4
Preferred stock Par value Sale price Flotationcost Annual dividend A $ 100 $ 101 $ 9.00 11% B 40 38 $ 3.50 8% C 35 37 $ 4.00 $ 5.00 D 30 26 5% of par $ 3.00 E 20 20 $ 2.50 9% Solution Stock A Par value $ 100 Sale price $ 101 Flotation cost $ 9.00 Annual dividend 11% Dividend payment Proceed from sale Cost of preferred stock By using cell references calcualte the cost of preferred stock A
Preferred stock Par value Sale price Flotationcost Annual dividend A $ 100 $ 101 $ 9.00 11% B 40 38 $ 3.50 8% C 35 37 $ 4.00 $ 5.00 D 30 26 5% of par $ 3.00 E 20 20 $ 2.50 9% Stock E Par value $ 20 Sale price $ 20 Flotation cost $ 2.50 Annual dividend 9% Dividend payment Proceed from sale Cost of preferred stock By using cell references to the given data calucalte the dividend payment of preferred stock E. By using cell references to the given data calculate the proceeds from sale of preferred stock E. By using cell references to the given data calculate the cost of preferred stock E.
Preferred stock Par value Sale price Flotationcost Annual dividend A $            100 $            101 $           9.00 11% B                  40                  38 $           3.50 8% C                  35                  37 $           4.00 $           5.00 D                  30                  26 5% of par $           3.00 E                  20                  20 $           2.50 9% Stock C Par value $              35 Sale price $              37 Flotation cost $           4.00 Annual dividend $           5.00 Proceed from sale Cost of preferred stock By using cell references to the given data calculate the proceeds from sale of preferred stock C. By using cell references to the given data calucalte the cost of preferred stock C.
Preferred stock Par value Sale price Flotationcost Annual dividend A $            100 $            101 $           9.00 11% B                  40                  38 $           3.50 8% C                  35                  37 $           4.00 $           5.00 D                  30                  26 5% of par $           3.00 E                  20                  20 $           2.50 9% Stock D Par value $              30 Sale price $              26 Flotation cost (% of par) 5% Flotation cost Annual dividend $           3.00 Proceed from sale Cost of preferred stock By using cell references to the given data calculate the flotation cost of preferred stock D. By using cell references to the given data calculate the proceeds from sale of preferred stock D. By using cell references to the given data calculate the cost of preferred stock D.
Preferred stock Par value Sale price Flotationcost Annual dividend A $            100 $            101 $           9.00 11% B                  40                  38 $           3.50 8% C                  35                  37 $           4.00 $           5.00 D                  30                  26 5% of par $           3.00 E                  20                  20 $           2.50 9% Solution Stock A Par value $            100 Sale price $            101 Flotation cost $           9.00 Annual dividend 11% Dividend payment Proceed from sale Cost of preferred stock By using cell references to the given data calculate the proceeds from sale of preferred stock A
What is the yield to maturity of a share of Six Flags B $1.88 preferred stock if the investor buys the stock at the following market prices? Assume dividends are paid annually.a. $32.00b. $27.00c. $18.00

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beta associated with eac d) Explain the betas of the two stocks