Long 1 lot Syarikat XYZ stock @ RM 15Long 1, 3-month Syarikat XYZ put @ RM 0.15 B C D E Stock Price of maturity Value of long stock position Profit/loss to Long Put position @ 0.15 Value of combined position at maturity 4 10 -5000 4850 -150 5 11 -4000 3850 -150 6 12 -3000 2850 -150 7 13 -2000 1850 -150 8 14 -1000 850 -150 9 15 0 -150 -150 10 16 1000 -150 850 11 17 2000 -150 1850 12 18 3000 -150 2850 13 19 4000 -150 3850 14 20 5000 -150 4850 1. Based on table above Draw the payoff profile of combined positions and calculate: -Max Profit -Max Loss -Breakeven point

Long 1 lot Syarikat XYZ stock @ RM 15Long 1, 3-month Syarikat XYZ put @ RM 0.15 B C D E Stock Price of maturity Value of long stock position Profit/loss to Long Put position @ 0.15 Value of combined position at maturity 4 10 -5000 4850 -150 5 11 -4000 3850 -150 6 12 -3000 2850 -150 7 13 -2000 1850 -150 8 14 -1000 850 -150 9 15 0 -150 -150 10 16 1000 -150 850 11 17 2000 -150 1850 12 18 3000 -150 2850 13 19 4000 -150 3850 14 20 5000 -150 4850 1. Based on table above Draw the payoff profile of combined positions and calculate: -Max Profit -Max Loss -Breakeven point

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 11P

See similar textbooks

Similar questions

Long 1 lot Syarikat XYZ stock @ RM 15Long 1, 3-month Syarikat XYZ put @ RM 0.15 Stock Price of maturity Value of long stock position Profit/loss to Long Put position @ 0.15 Value of combined position at maturity 10 -5000 4850 -150 11 -4000 3850 -150 12 -3000 2850 -150 13 -2000 1850 -150 14 -1000 850 -150 15 0 -150 -150 16 1000 -150 850 17 2000 -150 1850 18 3000 -150 2850 19 4000 -150 3850 20 5000 -150 4850 1. Based on table above Draw the combined position graph and calcuate the: a. Max loss b. Max Profit c. Break even point
Assume the company earns $1.62 per share. Calculate the yield percent (round to the nearest tenth percent). 52 Weeks HI LO Stock (Sym) DIV YLD % PE Volume (100's) Close Net Change 49.94 40.25 Jaymen Co. 0.58 51,615 46.90 − 0.50 Yield percent %
(Valuing common Stock) Assume the following: • The investor’s required rate of return is 15 percent. • The expected level of earnings at the end of this year (E1) is $5.00. • The retention ratio is 50 percent. • The return on equity (ROE) is 20 percent (that is, it can earn 20 percent on reinvested earnings). • Similar shares of stock sell at multiples of 10 times earnings per share. a. Determine the price/earnings ratio (P/E1) b. What is the stock price using the P/E ratio valuation method? c. What is the stock price using the dividend discount model? d. What would happen to the P/E ratio (P/E1) and stock price if the firm could earn 25 percent on reinvested earnings (ROE)? e. What does this tell you about the relationship between the rate the firm can earn on reinvested earnings and the P/E ratio? 2. Jelaskan mengapa investor menganggap bahwa saha
(Valuing common Stock) Assume the following: • The investor’s required rate of return is 15 percent. • The expected level of earnings at the end of this year (E1) is $5.00. • The retention ratio is 50 percent. • The return on equity (ROE) is 20 percent (that is, it can earn 20 percent on reinvested earnings). • Similar shares of stock sell at multiples of 10 times earnings per share. A. Determine the price/earnings ratio (P/E1) B. What is the stock price using the P/E ratio valuation method? C. What is the stock price using the dividend discount model? D. What would happen to the P/E ratio (P/E1) and stock price if the firm could earn 25 percent on reinvested earnings (ROE)? E. What does this tell you about the relationship between the rate the firm can earn on reinvested earnings and the P/E ratio?
Question content area top Part 1 (Preferred stock valuation) Kendra Corporation's preferred shares are trading for $29 in the market and pay a $4.70 annual dividend. Assume that the market's required yield is 17 percent. a. What is the stock's value to you, the investor? b. Should you purchase the stock? Question content area bottom Part 1 a. The value of the stock to you, the investor, is $enter your response here per share. (Round to the nearest cent.)
A share of stock A is selling at K23.50. A summary of the uncertainty about next year’s holding period return with three possible scenarios: Business Conditions Scenario,s Probability, p End of Year Price High Growth 1 0.35 K35 Normal Growth 2 0.30 K27 No growth 3 0.35 K15 Annual dividends are K4.40, K4 and K4 under the different business conditions High, Normal and No growth, respectively. Required: (i). Calculate the annual holding period returns for each of the three scenarios and the expected HPR and the standard deviation of the HPR. (ii). A financial analyst forecasts the return on the LuSE All share index portfolio over the coming year will be 10 %. The one year T-bill rate is 5 %recent returns of the Index suggest a standard deviation of returns to be 18 %. (iii) What does this information suggest about the degree of risk aversion of the average investor assuming the average portfolio resembles the…
Common stock valuation) Assume the following: • the investor's required rate of return is 12.5 percent, • the expected level of earnings at the end of this year (E1) is $14, • the retention ratio is 45 percent, • the return on equity (ROE) is 15 percent (that is, it can earn 15 percent on reinvested earnings), and • similar shares of stock sell at multiples of 9.565 times earnings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price earnings ratio (P/E1). c. What is the stock price using the P/E ratio valuation method? d. What is the stock price using the dividend discount model? e. What would happen to the P/E ratio (P/E1) and stock price if the company increased its retention rate to 60 percent (holding all else constant)? What would happen to the P/E ratio (P/E1) and stock price if the company paid out all its earnings in the form of dividends? f. What have you learned about the…
(Common stock valuation) Assume the following: • the investor's required rate of return is 13.5 percent, • the expected level of earnings at the end of this year (E1) is $6, • the retention ratio is 40 percent, • the return on equity (ROE) is 15 percent (that is, it can earn 15 percent on reinvested earnings), and • similar shares of stock sell at multiples of 8.000 times earnings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price earnings ratio (P/E1). c. What is the stock price using the P/E ratio valuation method? d. What is the stock price using the dividend discount model? e. What would happen to the P/E ratio (P/E1) and stock price if the company increased its retention rate to 75 percent (holding all else constant)? What would happen to the P/E ratio (P/E1) and stock price if the company paid out all its earnings in the form of dividends? f. What have you learned about…
Assume the company earns $.70 per share. What was yesterday’s closing price? (Round your answer to the nearest cent.) 52 weeks LO Stock (Sym) DIV YLD % PE Volume (100's) Close Net Change 8.38 Shoreline HLT 0.08 13,411 11.19 − 0.25 Yesterday’s closing price=
Inputs for WACC (Re computed using CAPM only) LT Debt: 8000 bonds outstanding of a 5-year maturity; 1020 = PV; 5.8% = Coupon Rate(Semiannual) Common Stock: 42,000 shares outstanding; $22 price today Preferred Stock: 9000 shares, 4.5% dividend yield, $108 share price Other CAPM Information: ERm = 8% Rf = 2.00% Beta = 1.12 Tax Rate = 21% What is the WACC (please show inputs in Excel)?
XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 110 $ 3 2019 113 3 2020 100 3 2021 105 3 An investor buys four shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all five remaining shares at the beginning of 2021. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus…
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

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS

GET THE APP

About FAQ Academic Integrity Sitemap Document Sitemap

Contact Bartleby Contact Research (Essays)High School Textbooks Literature Guides Concept Explainers by Subject Essay Help Mobile App

GET THE APP

Privacy

Your CA Privacy Rights

Your NV Privacy Rights

About Ads

Manage My Data

bartleby, a Learneo, Inc. business

	B	C	D	E
	Stock Price of maturity	Value of long stock position	Profit/loss to Long Put position @ 0.15	Value of combined position at maturity
4	10	-5000	4850	-150
5	11	-4000	3850	-150
6	12	-3000	2850	-150
7	13	-2000	1850	-150
8	14	-1000	850	-150
9	15	0	-150	-150
10	16	1000	-150	850
11	17	2000	-150	1850
12	18	3000	-150	2850
13	19	4000	-150	3850
14	20	5000	-150	4850