X company stock price was $10 at the beginning of 2018, $14 at the beginning of 2019, $15 at the beginning of 2020, and $19 at the ending of 2020. Based on the previous information what will be the coefficient of variation for the stock assuming that the returns are equally probable. a. 28.4% O b. 36.3% Oc. 67% Od. 73.2% Clear my choice
Q: Explanation of Solution Determine the increase in stock price Stock Pr ice = [EPS × PERatio] -…
A: EPS is calculated using the Pat i.e. Net Profit after Tax divided by the No. of the company's shares…
Q: Current forecasts are for XYZ Company to pay dividends of OMR 2.000, OMR 2.350, OMR 2.600and OMR…
A: Dividends over the next 4 years: Year Dividend 1 2 2 2.35 3 2.6 4 2.85 Stock price at…
Q: Stock B Rate of Return Probability Rate of Return Probability 14…
A: Expected return is return considering the probability of the return.
Q: (Common stock valuation) Assume the following: • the investor's required rate of return is 16…
A: Growth rate = retention ratio * ROE
Q: Ashely's CFO wants to use P/E ratio to value the stock's terminal value in year 4. The CFO forecasts…
A: The price-to-earnings ratio (P/E ratio) is a valuation ratio that compares a company's current share…
Q: Year AT&T Stock Returns Market Index Returns 1 8…
A: Characteristic line of stock is the equation to predict stock return for a given market return.…
Q: Consider the following information regarding Kent Ltd, a listed company on ASX in Australia.…
A: Residual Income: It is the excess profit earned over and above the charge for equity.
Q: Year AT&T Stock Returns Market Index Returns 1 8…
A: Equation for stock return based on market return is constructed in this format: Y = mx +c Y is stock…
Q: A share of stock of A-Star Inc. is now selling for $23.50. A financial analyst summarizes the…
A: Selling price = $23.50 Holding period return will be: HPR = [ (End price - Current price) + dividend…
Q: An entity has an investment which analyst think that there will be a 40% probability that the…
A: The following information has been provided in the question: Probability that expected return will…
Q: Favorita candy's stock is expected to earn $4.30 per share this year. It's P/E ratio is 21.
A: The stock price is calculated by multiplying earning per share by the P/E ratio.
Q: Calculate the rate of return on a price-weighted index of the three stocks for the first period (t =…
A: Answer a. At t=0, the value of the index is: (100+65+70) / 3 = 78.33 At t=1, the value of the index…
Q: PLEASE SOLVE THIS QUESTION, ASAP: Q: Suppose a company estimates following one year returns from…
A: The expected return is the minimum rate of return that an investor expects from a stock or company…
Q: Year AT&T Stock Returns Market Index Returns 1 8…
A: Beta of a stock is the slope between the market return and the stock return and is calculated in…
Q: Perferred Stock Rate of Return. What is the normal rate of return on a peretual perferred stock with…
A: Formula:
Q: What is the required rate of return on a preferred stock with a $50 par value, a stated annual…
A: Computation:
Q: The standard deviation of stock returns of Park Corporation is60%. The standard deviation of the…
A: Given information: Standard deviation of Park Corporation is 60%, Standard deviation of market…
Q: The following is a collection of analyst forecasts of the eamings per share of WPS Corp. for Q3…
A: Note: The image is not very clear, hence the EPS to be calculated is quoted as EPSforecasted, and…
Q: mmon stocK has (-free rate is 4 percent an market risk prem 7 регcent. EQUIRED Calculate the…
A: Price of common equity can be present value of dividends and present value of terminal value of…
Q: Two shares X and Y are currently trading for $100 and $50. They are expected to pay dividends of $1…
A: A portfolio is the combination of various stocks that constitutes in varying weightages.
Q: The historical returns data for the past three years for Company A's stock is -6.0%, 15%, 15% and…
A: Security market line: A security market line is the graphical representation of capital asset…
Q: A stock had retums of 1 percent, 26 percent, 8 percent, and -38 percent annually for the past 4…
A: Using excel average and variance function
Q: Given the following stock quotation, find the highest price during the last year. (Refer to Exhibit…
A: Pfizer is a pharmaceutical giant incorporated in United States. The company is listed with New York…
Q: Demonstrate the impact of different values on a market value weighted stock index with a…
A: Market value is the market value of stocks but for those stocks only which are the outstanding…
Q: Question 1 • An analyst has gathered P/E information on two stocks, Firm A and Form B. Market Data…
A: Firm A:Firm A has a trailing PE of 10, lower than the trailing PE of peers. Also, its Leading PE of…
Q: Q-1: The following are the monthly rates of return for Madison Software Corporation and Kayleigh…
A: Given that,
Q: wo stock prices for six days are given below. Price A Price B 25 55 27 59 30 64 28 62 26 58…
A: The standard deviation is a tool that helps to measure the variation between the average data and…
Q: Compute Topp Company's price-earnings (PE) ratio if its common stock has a market value of $23.79…
A: Price Earning Ratio (P/E Ratio) The purpose of using the price earning ratio which provides the…
Q: A stock had retums of 11 percent, 26 percent, 8 percent, and -38 percent annunlly for the past 4…
A: Mean is the average of returns given over a period. Standard deviation is the variability of…
Q: From the following information Calculate Beta for the company ABCD Year…
A: A stock is a unit of equity ownership of a corporation that is issued in the financial markets for…
Q: Consider the following probability distrībution of retums for Alpha Corporation: Current Stock Stock…
A: Introduction: The expected return of stock refers to the return that is anticipated on a stock. A…
Q: XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price…
A: Rate of return is the annual income from an investment expressed as a proportion of the original…
Q: 4. Use the following information to answer the questions below: Day KLCI Stock A Stock B Return…
A: i. Expected Return of Stock A: E(RA) = (10%+5%+2%-3%-5%)/5 = 9%/5 = 1.8% Expected…
Q: ates of Return You are considering an investment in ether indvidual stocka or a porfolo of stocka.…
A: Given Years = 2015, 2016, 2017, 2018, 2019 FA = -22.00% , 34.00 , 29.00, -2.00, 30.00 FB = -4.00%,…
Q: 1. A share of stock of company is now selling for 23.5 lei. A financial analyst summarizes the…
A: Portfolio: Investors do not invest all of their money in a single asset. In order to meet their…
Q: Preferred Stock Rate of Return What is the required rate of return on a preferred stock with a $50…
A: Calculation of dividend:
Q: CDB stock is currently priced at $57.24. The company will pay a dividend of $6.01 next year and…
A: Answer - Calculation of Growth rate - Given, Share price= $57.24 Next year dividend = $6.01…
Q: A preferred stock from Duquesne Light Company (DQU-PRA) pays $2.10 in annual dividends. If the…
A: Present Value of Stock = Annual Dividend / Rate of Return
Q: Below is the stock price and dividend history for No-Cameras-Allowed Inc. (NCA), company organizing…
A: Honor Code: Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must…
Q: Common stock valuation) Assume the following: the investor's required rate of return is 14 percent,…
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: The returns of Al Haq Company is as follows. Year 1=6, Year 2=(-10), Year 3%=D18, Year4=22. The…
A: Year Return Difference (Return-9%) 1 6% -3% 0.090000% 2 -10% -19% 3.610000% 3 18% 9%…
Q: alculate the following ratios for Friendly Fashions in 2021. (Enter your Dividend yield and…
A: Return on Equity = Net Income/ Stockholders Equity Dividend yield = Dividend per share/ Stock price…
Q: Year AT&T Stock Returns Market Index Returns 1 8…
A: Correlation: It shows the relationship between the movement of the return of two stocks or assets…
Step by step
Solved in 3 steps
- CALCULATING THE WACC Here is the condensed 2019 balance sheet for Skye Computer Company (in thousands of dollars): Skyes earnings per share last year were 3.20. The common stock sells for 55.00. last years dividend (D0) was 2.10, and a flotation cost of 10% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of 9%. Skyes preferred stock pays a dividend of 3.30 per share, and its preferred stock sells for 30.00 per share. The firms before-lax cost of debt is 10%, and its marginal tax rate is 25%. The firms currently outstanding 10% annual coupon rate, long-term debt sells at par value. The market risk premium is 5%, the risk-free rate is 6%, and Skyes beta is 1.516. The firms total debt, which is the sum of the companys short-term debt and long-term debt, equals 1.2 million. a. Calculate the cost of each capital component, that is, the after-tax cost of debt, the cost of preferred stock, the cost of equity from retained earnings, and the cost of newly issued common stock. Use the DCF method to find the cost of common equity. b. Now calculate the cost of common equity from retained earnings, using the CAPM method. c. What is the cost of new common stock based on the CAPM? (Hint: Find the difference between r1 and rs as determined by the DCF method, and add that differential to the CAPM value for rs.) d. If Skye continues to use the same market-value capital structure, what is the firms WACC assuming that (1) it uses only retained earnings for equity and (2) if it expands so rapidly that it must issue new common stock?Ratio Analysis Consider the following information taken from the stockholders equity section: How do you interpret the companys payout and profitability performance? Required: 1. Calculate the following for 2020. (Note. Round answers to two decimal places.) 2. CONCEPTUAL CONNECTION Assume 2019 ratios were: and the current year industry averages are: How do you interpret the companys payout and profitability performance?Begin with the partial model in the file Ch02 P21 Build a Model.xlsx on the textbooks Web site. a. Using the financial statements shown here for Lan Chen Technologies, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for 2020. The federal-plus-state tax rate is 25%. b. Assume there were 15 million shares outstanding at the end of 2019, the year-end closing stock price was 65 per share, and the after-tax cost of capital was 10%. Calculate EVA and MVA for 2020. Lan Chen Technologies: Income Statements for Year Ending December 31 (Millions of Dollars) Lan Chen Technologies: December 31 Balance Sheets (Thousands of Dollars)
- 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…XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 130 $ 2 2019 153 2 2020 128 2 2021 133 2 An investor buys five 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 six 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…XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 120 $ 4 2019 144 4 2020 108 4 2021 120 4 An investor buys three 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 four remaining shares at the beginning of 2021.a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Arithmetic average rate of return 5.31% Geometric average rate of return b. What is the dollar-weighted rate of return? (Hint: Carefully 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. If your calculator cannot calculate internal rate of return, you will have to use trial and…
- An entity has an investment which analyst think that there will be a 40% probability that the expected return will be 10%; 50% chance it will be 6% and 10% chance that the return will be 20 %. Calculate the expected returns Calculate the standard deviation An entity has a stock valued at $15 on December 31, 2019. On December 31, 2020, the stock was priced at $10 per share, During the period, directors declared and paid final dividends of $6 for each ordinary share held. What is the shareholders’ returnThe following information is available for entity RR:2021 2020Share price as at 31 December R9.05 R5.12Earnings per share for the year to 31 December R0.65 R0.38Dividend per share for the year to 31 December R0.17 R.30Required:a) i) calculate the P/E ratio and the dividend yield for RR at 31 December 2021 and comparative figures for 2020.ii) Analyse the financial information for RR from the viewpoint of an investor. b) Explain the limitations that would exist if you were to compare these ratios and market information for RR with that of an entity whose shares were listed on a stock exchange in a different country.Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2016 (23.80 %) (17.70 %) 2017 22.50 24.50 2018 14.25 24.00 2019 (2.25 ) (9.70 ) 2020 25.00 14.60 Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places. Stock A: % Stock B: %
- You bought a stock on 1 January 2018 for $135.5 and below are the year-end price data and annual dividends for the stock: Date Closing Price Annual Dividend 31 December 2017 135.5 3.6 31 December 2018 138.2 3.65 31 December 2019 136.8 3.5 31 December 2020 140.7 3.7 What is the standard deviation of returns on this stock over the 2018-2020 period?The table below lists the annual return on stock W between 2015 and 2019. Year 2015 2016 2017 2018 2019 Annual Return 12% -10% 20% -4% -8% The annual realized compounded return on stock W between 2015 and 2019 is closest to _____. A. 1.33% B. 2.33% C. 2% D. 3%Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following November 2019 expiration options on a single share, assuming that the stock price on the expiration date is $143. (Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.)