You decide to invest P35,000 in RX Pharmaceuticals, P35,000 in TS Banks, and P10,000 in each of the other three stocks. Based on this information, what should you assume to be his portfolio's expected return? 13.55% 8.37% 14.80% 15.60%
Q: rojects. The ihta Tal fates of return are as folloWS: Internal Rate Project of Return 11 12% 15 13…
A: IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows.…
Q: D3
A: A money market hedge is a method for securing in the value of a country's currency in a…
Q: LExplain what happens to the bond price and interest rate and why. i) i1) ii1) Expected inflation…
A: A bond's price is the present discounted value of its future cash flow. It denotes the total of the…
Q: A bank applies a semi-annually capitalized nominal rate of 11.8% for an investment. Calculate…
A: The effective rate for any period refers to the actual proportionate cost which will be paid for…
Q: BURNER Co. is considering two mutually exclusive projects, Project A and Project B. The projects…
A: Net Present Value: It is a technique for adjusting the current value of all future cash flows…
Q: National Co.’s stock sells for P35 that recently paid a P5 dividend. The growth rate will remain the…
A: As per formula Cost of newly issued equity = [D0*(1+g)/(P0-F)]+g Where D0 - Recent dividend i.e. P5…
Q: Suppose you invest into Fund X for 15 months with a monthly interest rate of 8%. Each month you pay…
A: Future Value: It is the worth of a current asset at a future date based on an assumed rate of…
Q: Hardware Co. is estimating its optimal capital structure. Hardware Co. has a capital structure that…
A: Current beta equity is calculated as 1.2. This is the levered beta with 20:80 debt equity ratio. We…
Q: 1. What is parental investment theory? Do non-present 'parents' exhibit parental investment? a.…
A: Investment is the commitment of an asset to increase in value over time. Investment necessitates the…
Q: National Co. has a financial break-even point at P260,000. Th company paid an annual interest of…
A: Fianancial Break even point is the minimum level of EBIT needed to satisfy all the fixed financial…
Q: (b) Calculate the effective interest rate paid by Vri.com and Xadine in the following swap. Vri.com:…
A: Interest Swapping- Under this a person who is taking loan at fixed rate wants to changed it into…
Q: Describe how the 2008 financial crisis, when analyzed alongside the fall of LTCM, provides evidence…
A: The 2008 financial crisis occurred due to the burst in housing bubble that was fueled by subprime…
Q: You take out a loan in the amount of $271,000 with annual equal repayments over the next 20 years.…
A: Annual Payment = P / ((1-(1+r)-n)/r) Where P = Principal Amount r = Rate of interest n = Numbers…
Q: What is the quarterly payment on a loan of $22,000 for 5 years at i= 8% per year, compounded…
A: Mortgage/ Borrowings: Borrowings are the loan which is taken by the individual to meet its…
Q: Your boss asks you to review an option to lease an equipment storage facility that the firm needs.…
A: Present value of the annuity due Annuity due is a series of equal payment at equal interval,…
Q: In one year: Firm XYZ will earn $90 if its businesses perform well. The Firm owes a $60 payment to…
A: Data given: If business performs well : payment due to creditors= $60 (Chance 50%) If business…
Q: LENLEN Company is considering on investing in new automated machinery. The machinery will be used…
A: Present value = (C1 * (1+r)-1)+ (C2 * (1+r)-2) + ...... +(Cn * (1+r)-n) Where r = Required rate of…
Q: The type of the risk that can be eliminated by diversification is called
A: the type of the risk that can be eliminated by diversification is called
Q: A stock has an expected return of 8% and a volatility of 9%. The stock is currently traded at price…
A: The following information has been provided in the question" Stock Price =$30 Exercise or Strike…
Q: A typical London cyclist might expect to earn £40k a year. This is reduced to £20k for one year…
A: London cyclists might expect to earn £40k a year. This is reduced to £20k for one year following a…
Q: average life time value ot
A: The average lifetime value is to be calculated by multiplying the average order with the average…
Q: If the interest rate on comparable debt is 2.0% is your broker fairly pricing the bond? (What is the…
A: Bond: It is a debt instrument issued by the firm (issuer) to raise debt capital. The issuer pays…
Q: What is the present value of a 5-year annuity of $4,900 with the first payment to be received 3…
A: Annual payment = $4900 Interest rate = 7% Number of annual payments = 5
Q: National Corporation finances its projects with 40 percent debt, 10 percent preferred stock, and 50…
A: Yield to maturity = 0.084 Cost of preferred stock = 0.09 Cost of common stock = ? Risk free rate =…
Q: Critically discuss whether, in general, mergers and acquisitions are successful in practice.
A: The phrases "mergers" and "acquisitions" are frequently used together, although their meanings…
Q: getting rich. 2. In evaluating alterna
A: Financial planning helps a person in achieving goals of one’s life by selecting the best alternative…
Q: Becky is a corporate account manager at a company that sells athletic equipment to other businesses.…
A: Bonus is the salary paid to an employee by the employer in addition to the basic salary. Bonuses…
Q: 3) What three things are required to make revenue management work AND why?
A: Revenue management is referred as the disciplined analytics application, which helps in prediction…
Q: Explain the Diamond model of delegated monitoring
A: Diamond model is referred as the model, which describes the competitive advantage of the nation in…
Q: bought a smartphone worth Php72,000 and made a downpayment of Php15,000. The remaining balance must…
A: The periodic payments are paid for the loan and these loans carry the payment of interest and…
Q: Which of the following is not an assumption made by Modigliani and Miller in relation to the…
A: The question is related to theories of Capital Structure. As per MM Approach, a change in…
Q: since its competitor opened a shop right in front of Hail's store. To increase its sales, is…
A: The company gives more credit period to increase the sales but the new credit policy will be cost…
Q: See the "Madoff Securities" case for this question. Professional auditing standards discuss the…
A: GAAS are a set of principles that auditors follow while analyzing a company's financial records.…
Q: Speculating with Currency Call Options. ABC Inc., purchased 75,000 units call option on British…
A: Net profit is the total profit earned by the company after paying interest and tax , In this all…
Q: Mr. Jones will invests P 5,000 in a fund at the end of each 6 months to accumulate P 100,000 to buy…
A: Solved using Financial Calculator FV = 100,000 PMT = -5000 I/Y = 2.45/2 = 1.2250 CPT N = 18 semi…
Q: A P1,000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 2022. It is…
A: Bonds give income to investors in the form of coupon payments, which are commonly made quarterly,…
Q: The market value of Lays Corporation's equity is 50 million $ and the market value of its debt is 27…
A: Cost of equity = Risk free rate + (Market rate of return - risk free rate) * Beta Weight of equity…
Q: When choosing a mutual fund, one of the most important things to consider is your investment…
A: Income Objective: Nick is nearing retirement and is looking to purchase a mutual fund that will…
Q: Determine the IRR
A: IRR is the discount rate where NPV of the cashflows calculated using IRR will be Zeera, which means…
Q: A horizontal merger takes place between companies operating: a. At different stages of the…
A: Solution: When two or more entities start working by coming together, it is called a merger. There…
Q: b. Financial Management means planning, organizing, directing and controlling the financial…
A: Risk management refers to the process of identifying, analysing, and accepting or mitigating risk in…
Q: Which one of the following statements is correct?
A: Efficient Market Hypothesis: It states that the financial markets are efficient informationally.…
Q: A firm has a debt-to-equity ratio of 0.50. Its cost of debt is 12%. Its overall cost of capital is…
A: To calculate the cost of equity we will use WACC formula as follows: WACC = [Ke*E]+[Kd*D] Where…
Q: What are some of the current challenges facing financial regulators?
A: Financial institutions have undergone many changes in the past decades or so mainly due to…
Q: Kiambu County Government has received equipment worth Kshs.461,520,000 from an American Company…
A: Foreign exchange risk It is the losses that a international monetary exchange might bring about…
Q: How long does it take for $8,000 to become $12,500 when the interest rate is 8% per year. (ABET,…
A: Here we will use the concept of time value of money. As per the concept of time value of money the…
Q: The QYU, Inc. has sales of P5 million per year (all credit) and an average collection period of 35…
A:
Q: On December 12, 2022, Tin Company entered into a forward exchange contract to purchase 500,000 euros…
A: Companies use the forward contracts to hedge the position in spot market and gain or loss depends on…
Q: Hail & Sons operates for 240 days in a year. It has been offered credit terms of 4/30, net 90
A: Cost of non free credit would be the cost of discount given to the customer for doing early payment.
Q: Determine the B/C ratio for the following project. First Cost P100, 000 Project life, years 5…
A: B/C ratio known as the benefit-cost ratio is computed by calculating the present value of benefits…
Step by step
Solved in 2 steps
- GoBank is a FinTech company, it is a Banking Ap. people helps you budget better, takes the stress out of spending abroad, and even lets people earn interest on your savings. In 2021, GoBank had a net income of $1,712,500.00. The company had 300 000 shares of $4 par value common stock and 25 000 shares of 8%, $100 par, preference stock outstanding throughout the year. Each share of preference stock is both cumulative and convertible. Each share of preference stock is convertible into four shares of common stock. Compute the following for 2021: a. Basic Earnings per share? b. The number of shares to be used in computing the diluted earnings per shareLooking up a stock tip on Yahoo Finance that you received from your friend Lenny, you came across Cisco Incorporated. Reviewing their financials, you see that they paid $2.2 million in common stock dividends with only 10 million shares outstanding. Out of the $35 million in stockholder’s equity $4.8 million was retained earnings. You feel that the price of the stock in the market today is reasonable at $9.00 per share. But Lenny always told you that you needed to figure out these four ratios before investing in any stock. So, you need to calculate: A) P/E Ratio. B) Book Value Per Share. C) Earnings Per Share. D) Market to Book Ratio.The following information relates to five stocks listed in five different sectors at A Securities Exchange .The return on treasury bills is 8% and the average return in the market has been found to be 13%. Estimated Return(%) Beta Williamson tea 12 0.7 Equity Bank 8.2 1 Home Afrika 20 1.2 Bamburi Cement 5 1.4 Nation Media Group 10 -0.4 Using the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued or overvalued
- Adobe is a software company that creates the most innovative creativity apps. Recently their software has become cloud-based. Their price to book ratio is 1.67 and they currently have 1,000,000 shares outstanding. Below you will find an excerpt from their balance sheet for 2019 Calculate the stock price using the price to book ratio. If their stock price is listed on the stock market at $9, should the stockholders sell or hold the stock? Critically discuss the price to book ratio in valuing stocks and provide an alternative method to see if a stock is undervalued or overvalued.You invest $1,500 into a "hot stock" through the Robin Hood app. The stock does well in the first quarter and in the second quarter. At the end of the second quarter, the stock's value is $2,250 and you buy another $1,000 worth of shares. At the end of the year, your shares are now worth $3,300. What is your money-weighted return? State your answer as a raw number, not in decimal form (i.e. 13.21 not 0.1321) with two decimal places.The following information relates to five stocks listed in five different sectors at the Nairobi Securities Exchange .The return on treasury bills is 4% and the average return in the market has been found to be 10% Estimated Return(%) Beta Sasini Ltd 8 0.7 Stanbic Holdings 6.2 1 Scan group Ltd 15 1.2 Crown Paints Kenya 10.5 1.4 Sanlam Kenya PLC 13 -0.4 Required: Using the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued, overvalued or fairly valued.
- You are an entrepreneur that founded your IT company three years ago. You invested $100.000 and received 5 million shares of series A stock. Your companyhas been through three additional rounds of financing: Round price number of shares b 0.5 1000000 c 2 500000 d 4 500000 1. What is the Pre-Money Valuation for the series D funding round?2. What is the Post- Money Valuation for the series D funding round?3. Considering that you own the 5 million shares of Serie A round what percentage of the firm you own after serie D round?Adobe is a software company that creates the most innovative creativity apps. Recently their software has become cloud based. Their price to book ratio is 1.67 and they currently have 1,000,000 shares outstanding. Below you will find an excerpt from their balance sheet for 2019 Critically discuss the price to book ratio in valuing stocks and provide an alternative method to see if a stock is undervalued or overvalued.Use your own words to answer the following questions: Write the formula for the P/E ratio and what it measures? Should you invest in a company with high P/E or low P/E? A company has the following items for the fiscal year 2020: Revenue = 10 million Net income = 4 million The company has 2 million shares of stock Stock price per share = $70 Calculate the company’s earnings per share and P/E ratio
- In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. If you wanted to lever up the returns of this trade, you could have executed it in your _____ account. A) cash B) margin C) brokerage D) bankOn November 7, 2013, Twitter released its initial public offering (IPO) priced at $26 per share. When the day ended, it was priced at $44.90, reportedly making about 1600 people into millionaires in a single day.[20] At the time it was considered a successful IPO. Four years later, Twitter is trading at around $18 per share. Why do you think that occurred? Is Twitter profitable? How can you find out?A company has earnings of $3.18 per share. The benchmark PE for the company is 18. What stock price would you consider appropriate? Please use a HP 10bii+ Financial Calculator