uppose Johnson & Johnson and the Walgreen Company have expected returns and volatilities shown below, with a correlation of 22%. Calculate the expected return of a portfolio that is equally invested in J&J and Walgreen’s stock. Calculate the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson’s and Walgreen’s stock.

uppose Johnson & Johnson and the Walgreen Company have expected returns and volatilities shown below, with a correlation of 22%. Calculate the expected return of a portfolio that is equally invested in J&J and Walgreen’s stock. Calculate the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson’s and Walgreen’s stock.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 15.17EX: Profitability ratios The following selected data were taken from the financial statements of...

See similar textbooks

Similar questions

Baelfire Corporation A. 520,000 and 65,000 respectivelyB. 65,000 and 81,250 respectivelyC. 13,000 and 16,250 respectivelyD. 30,400 and 13,000 respectively
Steele Inc. Consolidated Statements of Income (in thousands except per share amounts) 2023 2022 2021 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before income taxes $645,179 $745,497 $660,302 Provision for income taxes 254,000 290,000 257,000 Net income $391,179 $455,497 $403,302 Steele Inc. Consolidated Balance Sheets (in thousands) ASSETS Dec. 31, 2023 Dec. 31, 2022 Current assets: Cash and equivalents $320,558 $41,235 Accounts receivable 1,056,911 837,377 Inventories 733,700…
Company A Company B Total Assets 250 million 300 million Debt (10%) 50 million 180 million Equity 200 million 120 million Calculate ROE of Company A and Company B when ROA for both of them is12% and 6% respectively
17. The following financial information was provided by Anya Company: Net Income 8,255,000.00 NOPAT 75,785,000.00 EBITDA 143,000,000.00 Net Profit Margin 6.00% Operating capital 425,070,000.00 After tax cost of capital 12.00% Tax rate 35.00% Refer to Anya Company, calculate its Interest Expense. Use 2 decimal places in your final answer
18. The following financial information was provided by Anya Company: Net Income 8,255,000.00 NOPAT 75,785,000.00 EBITDA 143,000,000.00 Net Profit Margin 6.00% Operating capital 425,070,000.00 After tax cost of capital 12.00% Tax rate 35.00% Refer to Anya Company, calculate its sales. Use 2 decimal places in your final answer
tion 8Income statement for the year ended 31 December, 2019 of KKMTN Ghana Ltd2018 2019ȼ ‘000 ȼ ‘000Turnover 420,000 523,600Cost of sales (330,000) (417,200)Gross profit 89,000 106,400Expenses:Administration 44,600 50,200Selling and distribution 15,400 (60,000) 19,600 (69,800)Profit before interest 29,000 36,600Debenture interest - (2,800)Net profit before tax 29,000 33,800Taxation (8,000) (10,000)Net Profit after tax 21,000 23,800Ordinary dividend paid 8,400 9,250Ordinary shares issued 12 million and trading at ȼ3 each as at yesterday onGSE.You are required to compute the following investment ratios:a). Earnings per shareb). Dividend per sharec). Payout ratiod). Price earnings ratioe). Earnings yield
b) Beximco Pharmaceuticals Ltd. has 68,200 of common stock outstanding. Beximco employs tk. 55,80,000 of debt capital carrying 10% interest charge. The overall cost of the capital is 12.50%. Its net operating income (EBIT) is tk.15,50,000. Required: (using NOI approach vii) Percentage of financial leverage viii) DPS
15. Refer to the following financial information of Scholz Company: NOPAT 8,250,000.00 EBITDA 17,725,000.00 Net Income 5,050,000.00 Capital Expenditures 6,820,000.00 After tax capital costs 6,280,000.00 Tax rate 40% Refer to Scholz Company, calculate its EVA. Use 2 decimal places for your final answer.
Multiple Choice Quiz: Bonaventure Company has total assets of $1,000,000, liabilities of $400,000, and equity of $600,000. What is its debt ratio (rounded to a whole percent)? a. 250% c. 67% e. 40% b. 167% d. 150%.
Q5. Here and Gone, Inc., has sales of $22,266,571, total assets of $14,998,717, and total debt of $3,554,344. If the profit margin is 12 percent, what is ROE? Enter the answer with 4 decimal places (e.g. 0.1234).
14 Summary information is given for SBMA, Inc. and PCIB Company at July 1, 2016. The quoted market price of SBMA and HIMYM shares are P36 and P40, respectively. SBMA Inc. HIMYM Inc. Book Value Fair Value Book Value Fair Value Current assets 8,000,000 9,000,000 24,000,000 24,000,000 Plant assets 22,000,000 26,000,000 26,000,000 25,000,000 Totals 30,000,000 35,000,000 50,000,000 49,000,000 Liabilities 5,000,000 5,000,000 15,000,000 15,000,000 Common Stocks, P10 10,000,000 20,000,000 APIC 1,000,000 3,000,000 Retained Earnings 14,000,000 12,000,000 Totals 30,000,000 50,000,000 HIMYM Inc. acquires all the net assets of SBMA by issuing…
X Co. has the following information: Sale $ 1,200,000 Cost of sales $800,000 Operating expenses $200,000 interest expense $ 20,000 Tax $ 10,000 current liabilities $120,000 Non-current liabilities $200,000 share capital $ 500,000 Retained earnings $ 300,000 the returns on capital employed ratio is a. 15.18% b. 17% c. 21.25% d. 1.5 x