Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem1: A stock has a required return of 12.25 percent. The beta of the stock is 1.15 and the risk free rate is 5%. Determine the market risk premium?

[A] 15.00%

[B] 6.30%

[C] 7.25%

[D] 1.30%

[E] 6.50%

problem2: If a stock's expected return exceeds its required return, this suggests that

[A] The company is probably not trying to maximize price per share.

[B] The stock is probably a good buy.

[C] Dividends are not being declared.

[D] The stock is experiencing supernormal growth.

[E] The stock should be sold.

problem3: Which of the following statements is CORRECT?

[A] The preemptive right is a provision in the corporate charter that gives common stockholders the right to purchase (on a pro rata basis) new issues of common stock.

[B] The stock valuation model, P0 = D1/ (rs g), cannot be used for firms that have negative growth rates.

[C] The stock valuation model, P0 = D1/ (rs g), can be used only for firms whose growth rates exceed their required return.

[D] If a company has two classes of common stock, Class A and Class B, the stocks may pay different dividends, but the two classes must have the same voting rights.

[D] An IPO occurs whenever a company buys back its stock on the open market.

problem4:  A stock is not expected to pay a dividend over the next four years. Five years from now, the company anticipates that it will establish a dividend of $1.00 per share (i.e., D5 = $1.00). Once the dividend is established, the market expects that the dividend will grow at a constant rate of 5 percent per year forever. The risk-free rate is 5 percent, the company's beta is 1.2, and the market risk premium is 5%. The required rate of return on the company's stock is expected to remain constant. find out the current stock price?

[A] $ 9.89

[B] $10.98

[C] $11.53

[D] $ 7.36

[E] $ 8.62

problem5: The risk-free rate, rRF, is 6 percent. The overall stock market has an expected return of 12%. Hazlett, Inc. has a beta of 1.2. find out the required return of Hazlett, Inc. stock?

[A] 12.8%

[B] 13.2%

[C] 13.5%

[D] 12.0%

[E] 12.2%

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M919013

Have any Question? 


Related Questions in Basic Finance

1 when are correlational research designs used in

1. When are correlational research designs used in behavioral research? What are their advantages and disadvantages? 2. What are a linear relationship and a curvilinear relationship? What does it mean if two variables ar ...

1 mr and mrs jones ages 40 and 38 have no dependents and

1. Mr. and Mrs. Jones, ages 40 and 38, have no dependents and plan to file a joint tax return for the year. They have salary income of $70,000, dividend income of $2,300, hobby loss of $1,700, and deductions for adjusted ...

1 what fraction of us public companies pays regular cash

1. What fraction of U.S. public companies pays regular cash dividends today? How has this changed over the past fifty years? 2. How does the fraction of NASDAQ-listed companies that regularly pay cash dividends compare w ...

Assignmentbackgroundfinancial literacy helps you to become

Assignment Background: Financial literacy helps you to become a better manager. Understanding the financial side of the business will make you more effective on the job and will make your work life more meaningful. The t ...

An authorised deposit institution adi issued a 6 january

An Authorised Deposit Institution (ADI) issued a 6% January 2016 bond with a face value of $15 000 on 31 January 2012 at a yield of 7%. Assume that coupon payments are made every six months. The bond was sold on 31 Janua ...

1 discuss the risks or benefits to the exporter and

1. Discuss the risks or benefits to the exporter and important contrasting accounts receivable financing and factoring. 2. Discuss the role of the factor for the exporter. How does the factor help an exporter? 3. Contras ...

Toynbspcorp produces and sells pinball machines its average

Toy Corp. produces and sells pinball machines. Its average selling price is currently $5,400 per game. Based on a review of its projected financial statements, the company's variable costs are $2,800 per unit sold and to ...

1 what is the functional aggregation paradigm and why is it

1. What is the functional aggregation paradigm and why is it important? 2. Compare and contrast the three stages of functional aggregation. 3. Discuss the three challenges logistics faces as it manages on a process, rath ...

Jacob money inc has a profit margin of 11 and a retention

Jacob Money Inc. has a profit margin of 11% and a retention ratio of 70%. Last year, thefirm had sales of $500 and total assets of $1,000. The desired total debt ratio is 75%. What is the firm's sustainable growth rate?

1 for each of the following patterns of databull what is

1. For each of the following patterns of data, • What is the probability of the researcher having made a Type 1 error? • What is the probability of the researcher having made a Type 2 error? • Should the null hypothesis ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen