For questions (1-6) bold the correct answer or complete with your result if none is correct. (1-2) The expected return on a stock with a current price of 20 lei is 16%. The corporation is expected to deliver a dividend of 1.2 lei per share. [1] The dividend yield expected by the investor equals: (a) 4% (b) 6% (c) 8% (d) 12% [2] The selling price of the stock equals: (a) 22 lei (b) 24 lei (c) 26 lei (d) 30 lei (3-4) The table below presents the cash-flows associated to an investment project: Year Cash-flow-1000 700 800 012 [3] For a cost of capital of 10% the NPV equals: (a) 297.52 (b) 500 (c) 363.64 (d) 388.43 [4] The internal rate of return of the project is: (a) 28% (b) 31.05% (c) 34% (d) 36.1%
For questions (1-6) bold the correct answer or complete with your result if none is correct. (1-2) The expected return on a stock with a current price of 20 lei is 16%. The corporation is expected to deliver a dividend of 1.2 lei per share. [1] The dividend yield expected by the investor equals: (a) 4% (b) 6% (c) 8% (d) 12% [2] The selling price of the stock equals: (a) 22 lei (b) 24 lei (c) 26 lei (d) 30 lei (3-4) The table below presents the cash-flows associated to an investment project: Year Cash-flow-1000 700 800 012 [3] For a cost of capital of 10% the NPV equals: (a) 297.52 (b) 500 (c) 363.64 (d) 388.43 [4] The internal rate of return of the project is: (a) 28% (b) 31.05% (c) 34% (d) 36.1%
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 8P
Related questions
Question
![For questions (1-6) bold the correct answer or complete
with your result if none is correct.
(1-2) The expected return on a stock with a current price of 20
lei is 16%. The corporation is expected to deliver a dividend
of 1.2 lei per share.
[1] The dividend yield expected by the investor equals:
(a) 4% (b) 6% (c) 8% (d) 12%
[2] The selling price of the stock equals:
(a) 22 lei (b) 24 lei (e) 26 lei (d) 30 lei
(3-4) The table below presents the cash-flows associated to an
investment project:
Year
Cash-flow-1000 700 800
012
[3] For a cost of capital of 10% the NPV equals:
(a) 297.52 (b) 500 (c) 363.64 (d) 388.43
[4] The internal rate of return of the project is:
(a) 28% (b) 31.05% (c) 34% (d) 36.1%
(5-6) Consider assets A and B with expected returns of
E(R)=10% and E(R)=20% and standard deviations of 6%
and 8%. The correlation coefficient between A and B equals
0.1. You have a total budget of 100000 mu and you want to
invest 10000 mu in stock A and the difference in stock B.
[5] The expected return of your portfolio equals:
(a) 17% (b) 19% (c) 16% (d) 15%
[6] The standard deviation of the portfolio is:
(a) 5.63% (b) 7.87% (c) 6.54% (d) 7.28%
For applications (7-10) fill in the blanks ......
(7) The annual rates of return for a stock is given in the table
below:
Year
1 2 3 4 5
Rate of return 5% 7% -4% 2% 9%
The five-year holding period return equals...
(8) Consider projects A and B with the following forecasted
net present values sensitive to the evolution of the economy:
Seenario I (p=0.3) II (p=0.7)
A (mil. Lei)
4
B (mil. Lei)
2
6.
Use the coefficient of variance to select the preferable
project.
CVA=....
CVB=......](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa2c10a7f-ec1b-41be-9ddf-8c8588bc47f6%2F4ec08174-17ae-49a9-904f-24d1e82dc13c%2Fgy7lz7q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:For questions (1-6) bold the correct answer or complete
with your result if none is correct.
(1-2) The expected return on a stock with a current price of 20
lei is 16%. The corporation is expected to deliver a dividend
of 1.2 lei per share.
[1] The dividend yield expected by the investor equals:
(a) 4% (b) 6% (c) 8% (d) 12%
[2] The selling price of the stock equals:
(a) 22 lei (b) 24 lei (e) 26 lei (d) 30 lei
(3-4) The table below presents the cash-flows associated to an
investment project:
Year
Cash-flow-1000 700 800
012
[3] For a cost of capital of 10% the NPV equals:
(a) 297.52 (b) 500 (c) 363.64 (d) 388.43
[4] The internal rate of return of the project is:
(a) 28% (b) 31.05% (c) 34% (d) 36.1%
(5-6) Consider assets A and B with expected returns of
E(R)=10% and E(R)=20% and standard deviations of 6%
and 8%. The correlation coefficient between A and B equals
0.1. You have a total budget of 100000 mu and you want to
invest 10000 mu in stock A and the difference in stock B.
[5] The expected return of your portfolio equals:
(a) 17% (b) 19% (c) 16% (d) 15%
[6] The standard deviation of the portfolio is:
(a) 5.63% (b) 7.87% (c) 6.54% (d) 7.28%
For applications (7-10) fill in the blanks ......
(7) The annual rates of return for a stock is given in the table
below:
Year
1 2 3 4 5
Rate of return 5% 7% -4% 2% 9%
The five-year holding period return equals...
(8) Consider projects A and B with the following forecasted
net present values sensitive to the evolution of the economy:
Seenario I (p=0.3) II (p=0.7)
A (mil. Lei)
4
B (mil. Lei)
2
6.
Use the coefficient of variance to select the preferable
project.
CVA=....
CVB=......
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