FI 311 Assignment 7
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Mark Potts FI 311 Assignment 7
Stock Choice:
Chevron (NYSE: CVX)
(Annual dividend amount: $6.04)
Find its dividend and then apply the zero-growth dividend formula using 10% as the required rate of return (the return rate the book gives for large-cap stocks)
V= 6.04/.10
V= $60.40
Please state the stock's current trading price.
Chevron Current Trading Price: $142.95
Please then finally state whether or not you should buy or sell the stock based upon these calculations.
Considering that the stock’s current trading price is $142.95 and I valued it at $60.40 using the zero-growth dividend model, I would not buy the stock. The required rate of return would have to be below 5% just to be near the current trading price. Source Link: https://www.fool.com/investing/stock-market/types-of-stocks/dividend-stocks/
high-yield-dividend-stocks/
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Related Questions
You have the following information:
Stock
Shares Outstanding
BOY Price
EOY Price
L
3,000
$ 15
$ 28
K
57,000
$ 31
$ 35
You want the beginning price-weighted index of these two stocks to be 500. Given this, what is the ending index value?
Multiple Choice
A. 408.33
B. 487.08
C. 511.19
D. 576.09
E. 612.24
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Question one
Suppose you have the following information from Muscat stock market
Stock
Share outstanding
Base day Closing price
Second day closing price
Salalah company
18
3
2.8
Dhofar power company
26
2.8
3.1
Oman company
10
4.1
2.1
Dhofar bank
28
3
1.8
Calculate
1. Price weighted index
2. Value weighted index
plz use the formula shows in the pictures
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Ch 08: Assignment - Risk and Rates of Return
Elle nolas a $5,000 portrollo that consists or rOur stocKs. Her investment in eacn stock, as well as each stock's beta,
is listed in the following table:
Standard Deviation
Stock
Investment
Beta
Perpetualcold Refrigeration Co. (PRC)
$1,750
0.90
12.00%
Zaxatti Enterprises (ZE)
1.70
$1,000
11.00%
Western Gas & Electric Co. (WGC)
$750
1.10
18.00%
Makissi Corp. (MC)
$1,500
0.40
25.50%
Suppose all stocks in the portfolio were equally weighted
Suppose all stocks in Elle's portfolio were equally
weighted. Which of these stocks would contribute the
Which of these stocks would have the least amount of
least market risk to the portfolio?
standalone risk?
Makissi Corp.
Perpetualcold Refrigeration Co.
Makissi Corp.
Western Gas & Electric Co.
Zaxatti Enterprises
Zaxatti Enterprises
Western Gas & Electric Co
O Perpetualcold Refrigeration Co.
If the risk-free rate is 7% and the market risk premium is 9%, what is Elle's portfolio's beta and required return?…
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1.
stock EPS share price Growth rate
A $0.30 $4.80 4%
B $0.40 $5.50 6%
C $0.50 $7.50 7%
D $0.60 $8.00 5%
Using the PEG ratio, rank the stocks in order of investment opportunity, the first having the best, the last having the worst.
A. C,B,D,A B. A,D,B,C C. C,D,B,A D. B,D,C,A
2.Which of the following not true regarding financial statement
A.Group financial statement be produced by each subsidiary as well as the parent entity
B.Profit must be separated between members of the parent company and that of minority interest
C.Minority interest share of equity represents that ‘part of a subsidiary’s equity not allocated to members of the parent company.
D.Group financial statements must be produced by the parent entity only.
E.None of the options provided.
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preferred Stock Rate of Return
What is the required rate of return on a preferred stock with a $50 par value, a stated annual dividend of 7% of par, and a current market price of (a) $51, (b) $84, (c) $107, and (d) $133 (assume the market is in equilibrium with the required return equal to the expected return)? Round the answers to two decimal places.
%
%
%
%
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Question content area top
Part 1
(Preferred stock valuation) What is the value of a preferred stock where the dividend rate is
13
percent on a
$100
par value, and the market's required yield on similar shares is
9
percent?
Question content area bottom
Part 1
The value of the preferred stock is
$enter your response here
per share. (Round to the nearest cent.)
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Answer in excel format and explain formulas used.
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A stock has had the following year-end prices and dividends:
Year
1
2355N
4
6
Price
$ 64.63
71.50
77.30
63.57
73.71
82.75
Dividend
Arithmetic average return
Geometric average return
$.66
.71
.77
.86
.93
What are the arithmetic and geometric returns for the stock?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
%
%
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naran
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What is the price of a stock at the end of Year 1 (P1) if the dividend for Year 2 (D2) is $5, the price at the end of Year 2 (P2) is $20, and the discount rate is 10 percent? (Round your answer to two decimal places.)
Multiple choice question.
$22.73
$25.00
$19.73
$18.18
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Question content area top
Part 1
(Preferred stock valuation) Pioneer's preferred stock is selling for
$21
in the market and pays a
$2.70
annual dividend.
a. If the market's required yield is
11
percent, what is the value of the stock for that investor?
b. Should the investor acquire the stock?
Question content area bottom
Part 1
a. The value of the stock for that investor is
$enter your response here
per share. (Round to the nearest cent.)
Part 2
b. Should the investor acquire the stock? (Select from the drop-down menus.)
The investor
▼
should
should not
acquire the stock because it is currently
▼
underpriced
overpriced
in the market.
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How would I complete this?
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Q2 - Returns on stocks X and Y are listed below:
Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3%
Consider a portfolio of 10% stock X and 90% stock Y.
What is the mean of portfolio returns?
Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
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What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 7% of par, and a current market price of (a) $51, (b) $89, (c) $109, and (d) $137? Round your answers to two decimal places.
a %
b %
c %
d %
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A stock has had the following year-end prices and dividends:
Year
0
1
~ 34
2
5
Arithmetic
returns
Geometric
Price
$ 32.5
returns
34.68
35.68
34.18
36.52
39.63
What are the arithmetic and geometric returns for the stock? (Round your answer to 2
decimal places. Omit the "%" sign in your response.)
Dividend
$ 0.15
0.31
1.63
0.22
%
0.41
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F1
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What is the rate of return on a preferred stock that has a par value of $50, a market price of $46.50, and a dividend of $4.10?
a.
8.20%
b.
11.34%
c.
8.82%
d.
12.20%
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Question A .The price of an American call on a non-dividend-paying stock is $4. The stock price is $31, the strike price is $30, and the expiration date is in 3 months. The risk-free interest rate is 8%. The upper and lower bounds for the price of an American put on the same stock with the same strike price and expiration date is $3.00 and $2.41, respectively.
Explain carefully the arbitrage opportunities if the American put price is greater than the calculated upper bound.
Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line
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