Q: CBA Offer Principal $10,000 with terms of 3 years Interest rate 7.2% pa compounding monthly,…
A: With mortgage, a series of equal periodic payments are made. This periodic payment includes the…
Q: onstant Dividend Growth Valuation Boehm Incorporated is expected to pay a $2.90 per share dividend…
A: The DDM states that the dividends paid by a company are good indicators of its financial health and…
Q: Kathy Hansen has a revolving credit account. The finance charge is calculated on the previous…
A: Revolving credit account ensures that the credit line is available to the account holder even as the…
Q: Xu Salon has a line of credit of $150,000 with an interest rate of 1.625 percent per quarter. The…
A: To calculate the effective annual interest rate on the arrangement, we need to take into account…
Q: Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.8%…
A: The required rate of return is calculated by application of capital asset pricing model and it is a…
Q: An investment analyst has purchased a CEC stock today for K1000.He intends to hold the stock for…
A: The success of an investment is gauged by the money-weighted rate of return. Determining the rate of…
Q: Virgina Corp.'s bonds currently sell for $960. They have a 6.35% annual coupon rate and a 20-year…
A: To calculate the yield to maturity (YTM), we need to determine the cash flows for the bond. The bond…
Q: A stock has an required return of 18 percent, its beta is 02.25, and the risk-free rate is 2.75…
A: Expected return on the market is calculated using following equation Required rate of return on…
Q: a €6000 loan is to be repaid at the end of 4.5 years by the sinking fund method. Interest is charged…
A: A sinking fund is a fund that the debtor establishes to deposit periodic payments into the fund to…
Q: You put half of your money in a stock that has an expected return of 14% and a standard deviation of…
A: The standard deviation of a portfolio is a measure of the total risk of the portfolio, which takes…
Q: Cachita Haynes. Cachita Haynes works as a currency speculator for Vatic Capital of Los Angeles. Her…
A: Explanation to Put Option: The value of the put option increases when the underlying asset value…
Q: Bella Traders uses a combination of shares and debt in their capital structure. The details are…
A: The weighted average cost of capital refers to the cost taht is incurred for generating the…
Q: You are currently 25 years old and landed your first job. Your retirement plan will make monthly…
A: To determine the amount that you can withdraw monthly in retirement, we can use the concept of a…
Q: A bond has a face value of $1,000. If this bond will mature in 5 years, pays interest semiannually,…
A: Bond valuation is an important concept. It uses the concept of yield to maturity or YTM. At YTM, the…
Q: A firm issues a bond today with a $1,000 face value, an 8% coupon interest rate, and a 25-year…
A: The total return expected on a bond if it is kept to the end of its maturity period and all interest…
Q: If you owe $1,000 on a credit card with 12% interest (monthly compounding) and make payments of…
A: To calculate the number of months it will take to pay off the credit card debt, we can use the…
Q: Assume that the real risk-free rate is 3.5% and that inflation is expected to be 7% in Year 1, 5.5%…
A: We will calculate Market risk premium using the following formula:…
Q: You must decide whether to buy a new car for $19,000 or lease the same car over a three-year…
A: Cost of buying refers to the amount that is incurred while purchasing an asset from the market. It…
Q: With continuous compounding at 4.25% p.a. for 25 years, what is the approximate future value of a…
A: The future value equation is used to compare various options because holding a given amount in cash…
Q: 21. Julia purchased a 5 year 6% annual coupon bond one year ago for $990. She sold the bond today…
A: Time = t = 4 years Coupon rate = 6% Present value of bond last year = pv = $990 Rate of return = r =…
Q: A bond has a semi-annual coupon payment of $32.4. What is the coupon RATE? Convert to a percent.…
A: To calculate the coupon rate we will use the below formula Coupon rate = (C*2)/FV Where C -…
Q: A 10 year 8% coupon bond with face value 100 sells for 90 and a 10 year 4% coupon bond with face…
A: In this problem, we have to buy ( long ) one bond and sell ( short ) the other bond so that we earn…
Q: Living beyond one's mens has become a way of life in America, one in which the status quo would seem…
A: Debt is a double-edged sword. On the one hand, it can be a useful tool to help achieve important…
Q: A bond is priced at 1169 and has a YTM of 0.055 when interest rates suddenly change by -80 basis…
A: A bond is a kind of debt security issued by the government and private companies for raising funds…
Q: A mutual fund’s net asset value is $39.30, but the fund charges a 3 percent load fee (front- loaded)…
A: A pool of funds in which multiple investors contributes their funds and a fund manager actively…
Q: 5. ABC Inc. had the following data for last year: Net income = $1000; Net operating profit after…
A: Formula for Free Cash Flow=NOPAT - Net Investment in Working Capital Working Note#1 Calculation…
Q: A broker who temporalarlt deposits personal funds into his brokerage trusst account ?
A: A broker is not allowed to keep their personal funds in the trust account that the brokerage…
Q: Find the present value and the amount of the annuity at the specified interest rate; Php 200…
A: An annuity is a type of security that pays a periodic sum over a specific period of time. An annuity…
Q: Discuss how risk can be reduced by diversification in a two-asset portfolio. Your discussion should…
A: A portfolio is a mix of multiple investment alternatives that the investor picked to put his money…
Q: you purchase a $10,000 T-note that matures on 12/31/28 (settlement occurs one day after purchase, so…
A: Accrued interest With days from the last payment (t), days within two coupon payments (T) and coupon…
Q: You are considering a project that will require an initial outlay of $54,200. This project has an…
A: Here, Required Rate of Return is 15%
Q: FCF and NPV for a project: Archer Daniels Midland Company is considering buying a new farm that it…
A: NPV NPV stands for Net Present Value. The amount of time until a cash flow is expected determines…
Q: You put up K500 at the beginning of the year for an investment. The value of the investment grows 4%…
A: The return a shareholder makes on a financial asset while the asset is held is known as the holding…
Q: How did the role of government influence the 2008 crisis according Brian Wesbury? Explain why you…
A: The Federal Reserve is responsible for - conducting monetary policy control the money supply The…
Q: South Korean firm is able to obtain a three-year loan inSouth Korean Won (KRW) at a fixed yearly…
A: In a currency swap, the parties agree to exchange cash flows denominated in one currency for those…
Q: ABC Inc. does not expect to grow in the next several years. its last annual dividend was $3.57 if…
A: Given: Last annual dividend = $3.57 Required return = 7% ABC Inc. does not expect to grow in…
Q: A company has common stock which paid a dividend of $2.75 per share last year. The company expects…
A: The dividend growth model is a technique employed to determine the stock's price. The process that…
Q: You just purchased a share of stock in ABC Corporation, at a cost of $1,400. Your broker has…
A: The income generated from any investment reveals its return. The average return earned over a time…
Q: Distinguish between different types of financing available to sport organizations
A: Financing for sport organizations are meant to cater to the unique requirements and need of sport…
Q: Consolidated Industries has a required return of 17.5 percent. The return on the market is 9 percent…
A: Given the following: Required Return = 17.5% Market Return = 9% Risk Free Rate = 2%
Q: 2. What is the major difference in the obligation of one with a long position in a futures (or…
A: The main difference between a futures (or forward) contract and an options contract is that a buyer…
Q: forecast is correct, what is the abnormal return (alpha) relative to the CAPM E(r) for Stock: D?…
A: To determine the alpha, we first need to determine the CAPM return using the formula below: Expected…
Q: Wildings, Inc. common stock has a beta of 1.2. If the expected risk free return is .04 and the…
A: The expected return for an investor is the return that the investor anticipates or expects to…
Q: A bond has a Macaulay duration of 7.50 and is priced to yield 5.5%. If interest rates go up so that…
A: The price of the bond refers to the price at which the bonds are to be traded between the buyers…
Q: a. A three-year zero-coupon bond or a five-year zero-coupon bond? b. A three-year zero-coupon bond…
A: Price of a bond is the PV of its future coupons and par value. A zero-coupon bond is a bond that…
Q: Give typing answer with explanation and conclusion A stock price is currently $40. Over each of…
A: An option contract indicates the agreement that allows its buyer to purchase or sale an underlying…
Q: Below is information regarding the capital structure of Micro Advantage Incorporated. On the basis…
A: The WACC refers to the average return that the company provides to all its stakeholders. It takes…
Q: You have gathered the following information on Stocks A & B. Assuming the stock market is efficient,…
A: Dividend means part or share of profits being distributed to shareholders. Dividend yield is ratio…
Q: Bio-Plasma Corporation is growing at 31% per year. It is all-equity-financed and has total assets of…
A: Actual growth rate = g = 31% Total assets = ta = $2.7 million Return on equity = roe = 22% plowback…
Q: Payment of P^(1),000.00 every other month for 2 years that will start after 3 years. Time Diagram…
A: It is a case where payment is done every other month for 2 years. At the same time, this series of…
Comment the CAPM result of Apple over 2022 and 2021
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Risk free rate = 5.00%; market return = 11.00%; and beta = 1.05. How much is the firm's cost of equity based on the CAPM? 11.30% 11.64% 11.99% 12.35%Which of the following capital structures is optimal? Debt Equity EPS Stock Price 40% 60% $2.95 $26.50 50% 50% $3.05 $28.90 60% 40% $3.18 $31.20 70% 30% $3.31 $30.00 80% 20% $3.42 $30.40 Question 1 options: 40% debt 50% debt 60% debt 70% debt 80% debt1. What is the required rate of return for the common equity shareholders using CAPM? 2. Use the year-end 2020 data to compute the market-to-book ratio. 3. What is the implied value to book ratio?
- Can you explain the information below market value added (MVA) analysis and interpretation of results below. Market Value of Equity:$133,341,000,000.00 Plus: Market Value of Debt:$13,677,000.00 Equals: Market Value of Firm:$133,354,677,000.00 Minus: Total Invested Capital:($1,944,100.00) Equals: MVA$133,356,621,100.00Para Inc is trading at a forward (EV/FCFF1) Ratio of 20, a forward (EV/ (EBIT1 (1-Tc)) ratio of 10 and (EV/ Capital) ratio of 2. Based on the information, answe the following A. Para Inc. Return on capital equal to ? B. Para Inc. Growth rate equal to ? C. Weighted average cost of capital equal to?4. What is the total present value of equity as of the beginning of 2021 using the implied value to book ratio multiple? 5. What is the estimated value per share using the implied value to book ratio?
- What is the debt ratio for a firm with an equity multiplier of 3.5? Multiple Choice 44.09 percent 58.51 percent 66.25 percent 71.43 percentUse the following tables to assess the worthiness of Verticon stock as an investment. Verticon Stock Data (Current and Historical) 3:45PM EDT Aug 16, 2011 Price 18.85 USD Change +0.64 (+3.51%) Mkt cap 147.1B Div/yield 0.20/4.24 Shares 8,012 Beta 0.70 Book/share 11.335 EPS 1.11 12/2010 12/2009 12/2008 (Millions of Dollars) Total Assets 195,014 195,949 111,148 Total Liabilities 107,201 122,935 53,592 Preferred Shareholders’ Equity 52 61 73 Common Shareholders’ Equity 87,761 72,953 57,483 Shares Outstanding 8,012 8,070 6746 Book/Share ? 9.040 8.521 Q1 (Mar ’11) 2010 Net profit margin 15.24% 12.24% Return on equity 11.60% 9.30% Which one in bold? One of the most important features of a stock is its book value. The book value per share of Verticon’s stock for the year 2010 was equal to (10.954, 13.693, 11.502). Looking at the (Market cap, EPS, change in price, beta value, ROE) ,…If Net Worth = 14, the Market Value of Assets = 250 with duration of 8.0, the Market Value of Liabilities = 200 with duration of 3.0, the calculation for the duration of equity would equal: Group of answer choices C. 1000 B. 100 A. 10 D. 1400
- Q-A For the following stable growth firm, calculate: Cost of equity using CAPM, having risk free rate to be 3%, market risk premium 7%, and equity beta 1.6 Current growth rate with required rate of return on equity of 14% and retention ratio of 80%. Calculate the present stock price using the current year's EPS of $1.4, a required return of 14%, a retention ratio of 80%, and the growth derived from part b. Discuss for which firms EBITDA can be used, instead of FCF, for investment analysis and valuations and why? Explain how EBITDA multiple can be calculated for a private company valuation.M12-15. Estimating Cost of Equity Capital Assume that a company’s market beta equals 0.6, the risk-free rate is 5%, and the market return equals 13%. Compute the company’s cost of equity capital. Round answer to one decimal place (ex: 0.0245 = 2.5%) Answer%Year ASX 300 Index ASX 300 Dividend Yield (%) Return_risky portfolio 2010 4760.79 3.76 - 2011 4052.27 4.93 -0.147788 2012 4626.27 4.33 0.142718 2013 5304.8 3.99 0.147531 2014 5348.93 4.24 0.009118 2015 5249.09 4.72 -0.017783 2016 5617.73 4.09 0.071008 2017 6023.3 4.04 0.072914 2018 5596.96 4.48 -0.070038 2019 6647.74 3.95 0.188447 2020 6574.33 2.82 -0.010619 Average Std.dev 3.86% 10.56% Year Risk free rate (%) Return_risk-free asset 2011 4.51 - 2012 3.11 -0.309484 2013 2.61 -0.163052 2014 2.75 0.055662 2015 2.34 -0.150000 2016 1.78 -0.238503 2017 1.77 -0.005618 2018 2.02 0.141243 2019 0.90 -0.554455 2020 0.02 -0.977778 Average 2.18 -24.47% Calculate: Assuming E(Rc) = 7%, use E(Rc) = Rf + y* (E(Rp) - Rf) 1. % of Risky Assets: 2. % of Risk Free Assets: 3. Standard Deviation of the portfolio