Question 10 3-month SA treasury bill rate 2% beta coefficient 0,491289463 market risk premium 8 % What is the cost of retained earnings? Answer %
Q: 10. Compute for the missing values in the table. Principal (P) 25,000 70,000 120,000 Time Nominal…
A: Here; i= perodic interest rate n= number of periods m = compounding periods in a year
Q: NPV(Net Present Value) with discount rate is 6% for this period and cashflow as followed. Period 0,…
A: Cash flows are the cash generated from the operation of the business organisation. In other words,…
Q: ΕΟΥ 3 4 Cash Flow $15,000 $22,000 $29,000 $8,000 $36,000 What is the uniform annual equivalent if…
A: Interest Rate = 12% Year Cash Flow 1 8000.00 2 15000.00 3 22000.00 4 29000.00 5…
Q: EOY 1 4. Cash Flow $15,000 $22,000 $29,000 $36,000 $8,000 What is the uniform annual equivalent if…
A: Interest Rate = 12% Year Cash Flow 1 8000.00 2 15000.00 3 22000.00 4 29000.00 5…
Q: EOY 1 3 Cash $8,000 $15,000 $22,000 $29,000 $36,000 Flow What is the uniform annual equivalent if…
A: Therefore, the uniform annual equivalent is $20,422 (rounded to nearest cent).
Q: Maturity Value (F) Principal (P) Rate (r) Time (t) Interest (I,) P 60,000.00 4% 15 (1) (2) (3) 12% P…
A: Interest = Principal x Rate x Time 1) Interest = 60,000 x 4% x 15 =36,000 2) Maturity Value =…
Q: QUESTION 1 For the below Cash Flow, find the total PW value using 10% interest rate years cost $…
A: As you have posted multiple questions, we will answer the first question for you. To get answers for…
Q: EXHIBIT 8 I Capital Market Data Yield 30-day Treasury Bill O.1% 10 year Treasury Bond 2.8% 10-ycar…
A: The question is based on concept and interpretation of key interest rate factor of economy. These…
Q: PROBLEM NO.5 Solve for ERR if 25% Mimimum Attractive Rate of Return 13% Interest Rate External…
A: Concept of ERR
Q: EXERCISE 2: FUTURE VALUES AND PRESENT VALUES With an 8% interest rate, calculate the (1) net future…
A: Given information: Cash flows for five years at the rate of an 8% interest are as follows: 0 $…
Q: QUESTION 7 BOA Issues $200m in CMO. 40% of the issue is floater tranche with index LIBOR currently…
A: Collateralized Mortgage Obligation(CMO) is an investment option where combinations of various…
Q: . Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal…
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: Calculating Profitability Index [L07] What is the profitability index for the following set of cash…
A: The Profitability index = Present value of future cash inflow / Initial Investment
Q: he following table shows the prices of a sample of Treasury strips. Each strip makes a single…
A: Given information : Face value 100 Year 1 price 98.652 Year 2 price 95.151 Year 3 price…
Q: ro forma balance sheet Peabody & Peabody has 2019 sales of $10.5 million. It wishes to analyze…
A: What is meant by a Balance Sheet? It is also known as the statement of financial position which…
Q: Year Cash Flow $275.000 1 $35,000 2 $65.000 36 $95.000 $135.000 $185.000 9-20 $245,000 Given the…
A: The Payback period is one of the capital budgeting techniques that do not take into account the…
Q: Problem 6-28 Discounted Cash Flow Analysis [LO1] The appropriate discount rate for the following…
A: Present worth or value (PW) of money/cash flow refers to the current value of any future sum of…
Q: Question 1 Price a 90-day bank bill that has a face value of $100,000 and a. b. C. has a yield of…
A: Lets understand the basics. For calcualting bond price based on yield, we need to use below formula.…
Q: 13. Calculating Profitability Index following set of cash flows if the relevant discount rate is 10…
A: Profitability Index = (NPV + Initial Investment ) / Initial Investment NPV can be calculated by…
Q: 12 - ABC Co. its selected financial statements items are given as following. Total assets equals to…
A: 12 a) Nominal Growth 20.00%, Reel Growth 6.19%
Q: Issue Price 105 Face Value 100 3 poin Coupon Rate 11% Years to maturity 5 Current yields 10%
A: Bonds are financial instruments that provide fixed returns to their holders. Bonds actually have a…
Q: Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest…
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: Question 15 A bank offers an APR of 3.25% compounded semiannually.Find the annual percentage yield…
A: An annual percentage yield is referred to as the real rate of return, which helps in obtaining the…
Q: Solve for ERR: 25%Minimum Attractive Raye of Return 13% Interest Rate External $7,250.00 Excess…
A: Concept of ERR
Q: 4. Gap and Duration Analysis a. Take the following balance sheet, which of the assets and labilities…
A: GIVEN Gap and Duration Analysis is
Q: ash Flow $1,000 t Rate/Period 6% of Periods 5 Value using a Time Line 1 2 ws Value of Each Cash Flow
A: Present value refer to the concept of determining the value of money on current date is…
Q: Question 8: Assume the following free cash flows for Elle Inc. for Year 6 and forecasted FCFF for…
A: Discount rate = 6% Terminal growth rate = 2%
Q: ΕΟΥ 1 3 4 Cash $8,000 $15,000 $22,000 $29,000| $36,000 Flow What is the uniform annual equivalent if…
A: CF1 = $8000 CF2 = $15000 CF3 = $22000 CF4 = $29000 CF5 = $36000 Interest rate (r) = 12%
Q: 8) The 10-year Treasury rate, Risk premium and beta are estimated as 8.3%, and 0.3 respectively.…
A: The expected return is the minimum required rate of return which an investor required from the…
Q: Tate borrowing rate of 11% per year. 1 4,000 Year 4 Cash Flow, $ -3,000 -4,000 3,000 -1,300 4,500 al…
A: MIRR is modified internal rate of return.
Q: Problem 9-11 Treasury Bills (LO1, CFA2) A Treasury bill with 109 days to maturity is quoted at…
A: Given information: Price of bond : 97.630 Days to maturity : 109 Assumptions: Face Value of bond :…
Q: roblem 4 (Determination of Optimal Average Cash Balance Using Baumol Model) avpee Inc., has two…
A: Cash management have two cost one is ordering cost and cost of carrying so optimal cash is needed to…
Q: Analyze the implications of interest rate changes on the original calculation (Origninal WACC 8%).…
A: Calculate the present value as follows:
Q: Q#03: Suppose you have cash flows as follows: End of Year Cash Flows ($) 1 8000 7000 3 6000 4 5000…
A: Cash Flows: Year Cash Flow 1 8,000.00 2 7,000.00 3 6,000.00 4 5,000.00 Interest Rate =…
Q: A 1.85% Coupon Treasury Inflation Protected Security (TIPS) last principal balance is $103,250. The…
A: As per last principal balance = 103250 Annual Inflation Rate = 2.25% Coupon Rate = 1.85%
Q: för Co. its selected financial statements items are given as following. Total assets equals to the…
A: Nominal growth = Increase in sales / initial sales
Q: 1) Find the PW, AW and FW of the following cashflow if the interest rate compound semiannually. P-7…
A: Present worth(PW), Annual Worth (AW) , and Future Worth (FW) are based on the concept of the time…
Q: One-year Treasury securities yield 3.8%. The market anticipates that 1 year from now, 1-year…
A: Given information: One-year treasury securities yield is 3.8% Expected yield 1 year from now is…
Q: CH012 Problem 1 . Your firm has just issued five- year floating-rate notes indexed to six-month U.S.…
A: LIBOR It is a benchmark rate. A rate at which the global banks lend the amount to one another.
Step by step
Solved in 2 steps
- Q18 If the company’s EBIT is OMR 500,000; market value of the equity is OMR 2,000,000 and value of Debt is OMR 4,000,000; then what is the overall cost of capital of the firm under Net Income Approach? a. 12.5% b. 10% c. 25% d. 8.33%Return to question Item2 Assume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Year Inflation(%) Stock Market Return(%) T-Bill Return(%) 1929 0.4 –14.6 4.8 1930 –3.9 –27.1 2.9 1931 –8.2 –49.8 1.4 1932 –10.8 –6.4 0.9 1933 1.0 63.8 0.5 What was the real return on the stock market in each year? What was the average real return? What was the risk premium in each year? What was the average risk premium?The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average real return earned on US T-bills. (Enter percentages as decimals and round to 4 decimals)
- 1. 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?Q29 If the company’s Interest on Debt is OMR 50,000 with 10% interest rate, the market value of Equity is OMR 800,000; then what is the Total Value of the firm under Net Operating Income Approach? a. OMR 2,000,000 b. OMR 500,000 c. OMR 1,300,000 d. OMR 800,000Please use the attached images as well... Compute the following: 4. For fiscal 2020: Free Cash Flow to Equity 5. Market Capitalization, Market to Book Value and the Price-Earnings Ratio as of year-end 2020 Stock Prices in 2018 = $68.98 2019 = $84.15 2020 = $107.82
- 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 portfolioM12-15. 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%Problem 9-21 Risk, Return, and Their Relationship (LG9-3, LG9-4)Consider the following annual returns of Estee Lauder and Lowes Companies: Estee LauderLowes CompaniesYear 123.9%6.0%Year 224.016.6Year 318.14.7Year 450.444.0Year 517.314.0Compute each stocks average return, standard deviation, and coefficient of variation.Note: Round your answers to 2 decimal places.
- % Return on T-Bills, Stocks and Market Index State of the economy Probability T-Bills Phillips Pay -up Rubber-made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean 7 16.9 2.07 19.60 15 Standard Deviation 0 23.4 15.62 18.92 17.71 Coefficient of Variation 0 1.39 7.55 0.97 1.18 Covariance with MP 0 0.04 -0.3 0.02 0.03 Correlation with Market Index 0 1 -1.0 0.69 1 Beta 0 1.32 -0.88 0.74 1 CAPM Req. Return 7 17.54 -0.02 12.89 15.0 Valuation (Overvalued/Undervalued/Fairly valued) Nature of stock Defensive Aggressive Defensive Defensive Defensive Showing all working complete the table showing valuation% Return on T-Bills, Stocks and Market Index State of the economy Probability T-Bills Phillips Pay -up Rubber-made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean 7 16.9 2.07 19.60 15 Standard Deviation 0 23.4 15.62 18.92 17.71 Coefficient of Variation 0 1.39 7.55 0.97 1.18 Covariance with MP Correlation with Market Index 0 1 -1.0 0.69 1 Beta 0 1.32 -0.88 0.74 1 CAPM Req. Return 7 17.54 -0.02 12.89 15.0 Valuation (Overvalued/Undervalued/Fairly valued) Fairly valued Overvalued Undervalued Undervalued Fairly valued Nature of stock Defensive Aggressive Defensive Defensive Defensive Showing all workings complete the table for Covariance…% Return on T-Bills, Stocks and Market Index State of the economy Probability T-Bills Phillips Pay -up Rubber-made Market Index Recession 0.2 7 -22 28 10 -13 Below Average 0.1 7 -2 14.7 -10 1 Average 0.3 7 20 0 7 15 Above Average 0.3 7 35 -10 45 29 Boom 0.1 7 50 -20 30 43 Mean 7 16.9 2.07 19.60 15 Standard Deviation 0 23.4 15.62 18.92 17.71 Coefficient of Variation 0 1.39 7.55 0.97 1.18 Covariance with MP 0 0.04 -0.3 0.02 0.03 Correlation with Market Index 0 1 -1.0 0.69 1 Beta 0 1.32 -0.88 0.74 1 CAPM Req. Return 7 17.54 -0.02 12.89 15.0 Valuation (Overvalued/Undervalued/Fairly valued) Fairly valued Overvalued Undervalued Undervalued Fairly valued Nature of stock Defensive Aggressive Defensive Defensive Defensive Using the data generated plot the…