tfolio P has a beta of 1.0.

Q: The present worth of all the cashflows of handmade earthen pots are shown until the end of year 8 is…

A: Given, The present worth of cashflows is $9,330 Discount rate is 12%

Q: a) What is the present worth ofequal payments of $25,000 made semi-annually (i.e., twice every year)…

A: Semi annual payment (P) = $25,000 Interest rate = 8% Semi annual interest rate (r) = 8%/2 = 4%

Q: Suppose you invest $2000 into a mutual fund that is expected to earn a rate of return of 11%. The…

A: Investment (PV) = $2000 Rate of return (r) = 11%

Q: To go on a summer trip, Bob borrows s700. He makes no payments until the end of 4 years, when he…

A: The total interest to be paid is calculated as simple interest amount for 4 years whereas total…

Q: Mr. Jhonny bought a car worth P900,000 last January 1, 2000, and intend to sell it for P300,000…

A: Annuity means a set of finite number of deposits/payments made at equal intervals of time for a…

Q: 27) You are pleased to see that you have been given a 4.48% raise this year.​ However, you read on…

A: The real purchasing power can be calculated after taking out the effect of inflation from the…

Q: G. R. Edwin Inc. had sales of $5.88 million during the past year. The cost of goods sold amounted to…

A: Tax liability is the amount of tax that a firm/individual needs to pay to the Government on its…

Q: How does the following contributed to capital market a) Information disclosure b)Liberalisation…

A: A financial market seems to be a place where consumers trade financial securities including bonds,…

Q: June 7, 2019, matures on July 1, 2039, and may be called at any time after July 1, 2029, at a price…

A: Yield to maturity refers to the total return that will be paid out from the time a bond is acquired…

Q: Illu.1: NIT Ltd. declared dividend at 25% on its re are quoted in the market at Rs.10. You are requi…

A: Dividend is defined as the return that a shareholder gets from the company for the money invested by…

Q: Von Bora Corporation​ (VBC) is expected to pay a $4.00 dividend at the end of this year. If you…

A: Value of a share of VBS stock = Dividend / (Required return - Growth rate) Dividend = $4.00 Required…

Q: Assume the following spot rates. Year Spot rate 1 3 2 4.5 3 5.5   Calculate the one-year…

A: The forward rate is the interest rate that the financial transaction gives for a future date. The…

Q: When considering the investor's desired outcome, if you have generated very large returns in the…

A: Re balancing strategy- In portfolio management, the importance of re-balancing strategy is…

Q: CCC Co issues a bond today that will pay a coupon of 8%, twice a year. The yield to maturity  for…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Energy efficiency of an equipment can be improved by 20% through enhanced maintenance leading to a…

A: Maximum allowable investment is the present value of fuel saving  The maximum allowable investment…

Q: You expect that Bean Enterprises will have earnings per share of​ $2 for the coming year. Bean plans…

A: Growth rate = Return on project * retention ratio Dividends = Earnings per share * payout ratio OR…

Q: elix Jones, a recent engineering graduate, expects a arting salary of $35,000 per year. His future…

A: Salary grow by fixed percentage that salary is geometric sequence of growing annuity and the present…

Q: 4. Mike wants to invest money every month for 30 years. He would like to have $500000 at the end of…

A: “Since you have asked multiple questions, we will solve the one question for you. If you want any…

Q: Benford Inc. is planning to open a new sporting goods store in a suburban mall. Benford will lease…

A: Equipment and fixtures  $ 3,50,000.00 Net working capital  $ 3,00,000.00 First-year sales  $…

Q: A corporation decides to deposit a fixed payment per quarter into an account earning 4% interest per…

A: Amount needed at the end of year 7 121000 Period  7 years No of period (Quarterly) 28 Rate of…

Q: A Province of Manitoba $250,000 face value bond carrying a 2% coupon was issued on December 1, 2006,…

A: Here, Face value = $250,000 Coupon rate = 2% Time to maturity = 30 years Market yield (YTM) = 4.19%…

Q: The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him…

A: Present value of annuity Annuity is a series of equal amount payment at equal interval for a…

Q: This is an amortized loan, because its payments contain: O Only the principal that must be repaid…

A: An amortized loan is that loan in which scheduled periodic payments are made. The payments are made…

Q: Which one of the following statements is false? a. Consumer loans are loans banks advance to…

A: Solution:- Loans means the advances made by the bank to the customers, while deposits means the…

Q: The King Carpet Company has $2,910,000 in cash and a total of $12,780,000 in current assets. The​…

A: The plan to reduce cash would have impact on both current assets and current liabilities which would…

Q: Drew, 72, is a widower with a gross estate worth $975,000. He is in the highest current marginal…

A: Correct option is (A) A charitable outright gift, since it reduces Drew's income tax liability…

Q: Calculate the present value:

A: Present Value of Annuity: It represents the present worth of the future annuity stream of cash…

Q: Dr. Sheldon Lee Cooper plans to purchase an equipment for his small physics display museum amounting…

A: The equivalent annual receipts and costs throughout the period of a project are known as equivalent…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: Initial cash flows is the cash flows occurred at the beginning of the project. It will be incurred…

Q: 4. What is the equivalent amount today of an annual deposit of Php200000 for 15 years if money is…

A: Solution : Equivalent amount today of annual deposit means that amount which was represent the…

Q: The buyer of a piece of real estate is often given the option of buying down the loan. This option…

A: Loan mortgage and discount points: A discount point with respect to mortgages refers to payments…

Q: Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The…

A: Solution : Money Market Hedge is that technique which provide the protection against loss which…

Q: otse Automotive is planning to expand its operation by planning to add a machine costing $90.000.…

A: Solution : Company Will choose Loan V/S Lease option which provide the lower Negative option.

Q: After learning the course, you divide your portfolio into three equal parts, with one part in…

A: The beta of overall portfolio is calculated as weighted proportion of beta into each respective…

Q: Price Forward Dividend 1T Target Est $75.20 $0.80 $87.76 Given the information in the table, t he…

A: Given: Forward dividend = $0.80 Forward price = $87.76 Required return = 14.80%

Q: You already have $54,700 in your savings account that earns 3.50% compounded annually. You will…

A: The concept of the time value of money states that the same amount of money has more value today…

Q: A stock has a required return of 11% and a dividend yield of 4%. The price of the stock is $90 and…

A: SOLUTION : GIVEN, Required return = 11% Dividend yield = 4% Stock price = $90   Now, Firsty we have…

Q: Dan is the sole owner of his closely held business and he is considering retiring within the next…

A: Amy will have a stepped-up basis in the property of $1,500,000.

Q: online payment method

A: Payment refers to the money transferred in exchange for goods or services decided or agreed upon…

Q: You are thinking about buying a stock and holding it for 2 years. You expect that the stock will pay…

A: Stock price is defined as the maximum price that an investor is ready to pay for a stock. It is…

Q: net cash flows for years 1 and 10 for this project.

A: Cash flows represent the inflow and outflow of cash from the company in a particular period of time.

Q: Argyl Manufacturing is evaluating the possibility of expanding its operations. This expansion will…

A: Cost of land = $120,000 Cost of building = $140,000 Cost of equipment = $250,000 Installation cost =…

Q: How much debt does the company now have, to the nearest thousand dollars? How much equity? What is…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently offers…

A: Solution:- Preferred stock is the stock issued by the corporate which get preference over the common…

Q: ou purchase a house for $250,000 by getting a mortgage for $200,000 and paying a $50,000 down…

A: Loan amount (PV) = $200,000 Interest rate = 4% Monthly interest rate (r) = 4%/12 = 0.33333333333%…

Q: Mannix Corporation stock currently sells for $100 per share. The market requires a return of 11…

A: P0 = D0(1 + g) / (R – g) D0 = P0(R – g) / (1 + g) D0 = Most recent dividend per share  P0 = Stock…

Q: Net present value f

A: Net present value refers to the difference between the net cash inflows and cash outflows in a…

Q: You are considering buying a stock that will pay a dividend of $2.5 next year. The dividend is…

A: The stock price can be calculated with the help of dividend discount model

Q: Felix Jones, a recent engineering graduate, expects a starting salary of $35,000 per year. His…

A: Solution : Due to averaged Increment in salary was 5% for last several years & interest rate was…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.