Ask Question, Ask an Expert


Ask Basic Finance Expert

1) Asset P has the beta of= 0.9. The risk-free rate of return is= 8%, while return on market portfolio of assets is= 14%. The asset's required rate of return is?

2) Firm has issued cumulative favoured stock with $100 dollar par value and 12% annual dividend. For past 2 years, board of directors has decided not to pay dividend. Favoured stockholders should be paid________________ prior to paying common stockholders.

3) Tangshan China stock is presently selling for $160 per share and firm's dividends are expected to increase at 5% indefinitely. Additionally, Tangshan China's most current dividend was= 5.50. Expected risk free rate of return is= 3 %, the expected market return is= 8%, and Tangshan has a beta of 1.20.

i) What is the expected return based on the dividend return model?

ii) What is the required return based upon capm

iii) Would Tangshan China be a good investment at this time? describe?

4) Mia's Doll Company has the outstanding favoured issue of stock with par value of= $100 and annual dividend of 10%(of par). Similar Risk favoured stocks are yielding 11.5% annual rate of return.

i) What is the present value of the outstanding preferred stock?

ii) What will occur to prices as risk free rate increases? Describe?

5) Champion Breweries should select between 2 assets purchases. Annual rate of return and related probabilities are given below sum up firm's analysis.
Asset A Assets B

Rate of Return Probability Rate of Return Probability
10% 30% 5% 40%
15% 40% 15% 20%
20% 30 25% 40%

For each asset compute:

i) Expected Rate of Return?

ii) The standard deviation of the return?

iii)The coefficient variation of the return?

iv) Which asset should champion chose?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914885

Have any Question? 

Related Questions in Basic Finance

1 when the federal reserve lowers the real interest rate

1. When the Federal Reserve lowers the real interest rate, what happens to the output gap and to the actual inflation rate? 2. What is the default risk premium, and why did it dramatically increase during the 2007-2009 r ...

1 what is meant by the term structural compression how does

1. What is meant by the term "structural compression"? How does this term affect logistics? 2. What is a horizontal company and how would this type of company be organized? What are the strengths of this type of organiza ...

1 develop a topic of interest to you and prepare both a

1. Develop a topic of interest to you, and prepare both a structured and an unstructured interview. Collect data from your classmates, and develop a method for coding the findings. 2. Create a sampling frame, and collect ...

Why do you suppose that foreign governments provide mncs

Why do you suppose that foreign governments provide MNCs with incentives to undertake FDI in their countries? Explain the theory of comparative advantage as a motive for foreign trade.

A small firm makes three similar products which all follow

A small firm makes three similar products, which all follow the same three-step process, consist- ing of milling, inspection, and drilling. Product A requires 12 minutes of milling, 5 minutes for inspection, and 10 minut ...

What primary factors determine the number of load cycles

What primary factors determine the number of load cycles required to break a bolt subject to fatigue loading? Describe the appearance of the break surface of a bolt which has failed in fatigue ? Where on a bolt are you m ...

During a congressional committee hearing at which goldman

During a Congressional Committee hearing at which Goldman Sachs CEO Lloyd Blankfein testified, Senator David Pryor of Arkansas asked Blankfein, "Why would clients believe in Goldman Sachs?" Blankfein replied that Goldman ...

Ethical dilemma- cindy and jack have always practiced good

Ethical Dilemma - Cindy and Jack have always practiced good financial habits, in particular, developing and living by a budget. They are currently in the market to purchase a new car and have budgeted $300 per month for ...

A human cannot hear sound at a frequency of 100 khz or

A human cannot hear sound at a frequency of 100 kHz or sound at 102 kHz. But if you walk into a room in which two sources are emitting sound waves, one at 100 kHz and the other at 102 kHz, you'll hear sound. Explain.

Marks inc expect a dividend of 520 per share in one year

Marks, Inc., expect a dividend of $5.20 per share in one year from now. The rate of return is 13% and the growth rate is 6.8%. How much would you be willing to pay for Marks' stock today? If the current market price of M ...

  • 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