Chapter 8Question 6Input area:Stock priceRequired returnOutput area:Dividend yieldNext year's dividendCurrent dividend$78.0010.9%

Dividend is amount of profit shared between the shareholders and company and it increases value of…

Answered: Chapter 8 Question 6 Input area: Stock…

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Chapter 8 Question 6 Input area: Stock price Required return $ 78.00 10.9%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Problem 10-11 Suppose that the market can be described by the following three sources of systematic risk with associated risk premiums. Risk Premium 6% 2% 5% Factor Industrial production (I) Interest rates (R) Consumer confidence (C) The return on a particular stock is generated according to the following equation: r=15% +1.4/+0.7R+0.90C+ e a-1. Find the equilibrium rate of return on this stock using the APT. The T-bill rate is 7%. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Equilibrium rate of return a-2. Is the stock over- or underpriced? O Underpriced Overpriced %
ACTIVITY 4 Given the following data, what should the price of the stock be? Required return: 10% Present dividend: P100 Dividend growth rate: 5%
Use the information below to answer the question 52WH 52WLo Ticker Div Yield % P/E Vol 00s High Low Close Net Chg 52.53 28.31 KO 0.65 1.34 13.80 6,412 54.12 32.50? -0.81 What was the previous day's closing price? O $51.32 O $48.74 O $50.10 O $49.32
Return rate
Problem 7-21 Dividend Yield [LO 3] You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Dividend) Dividend Yield % PE Ratio Close Price Net Change Hi Lo 77.40 10.43 Acevedo .36 2.6 6 13.90 −.24 56.31 33.92 Georgette, Incorporated 2.04 5.0 10 40.93 −.01 130.93 69.50 YBM 2.00 2.2 10 88.97 3.07 50.24 13.95 Manta Energy .80 5.2 6 15.43 −.26 35.00 20.74 Winter Sports .32 1.5 28 ?? .18 Find the quote for the Georgette, Incorporated. Assume that the dividend is constant. What was the highest dividend yield over the past year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What was the lowest dividend yield over the past year? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Module 4 Question 8
Problem 10-21 Arithmetic and Geometric Returns [LO 1] A stock has had the following year-end prices and dividends: Year Price Dividend $ 64.83 71.70 1 $ .70 3. 77.50 .75 4 63.77 .81 74.11 .90 84.75 .97 What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average return Geometric average return %
Esc Chapter 12 Practice Problems 1. Suppose a stock had an initial price of $77 per share, paid a dividend of $1.35 per share during the year, and had an ending share price of $83. Compute the percentage total return. Q Search 1 Q A N @ 2 W S F2 X # 3 E F3 D $ 4 R F DII % 5 F5 T G * F6 A 6 Y B * H & 7 PrtScn U N * 8 Home 1 M 9 Page K End о F10 ) 0 PgUp F11 P
Question 48 The S&P 500 Index returned: 5.1%, 6.9% , -7.3%, -8.1%, 7.2% Over the same period, BergAwesome Inc. had the following returns: 4.8%, 7.3 % , -6.2%, -11.7%, 8.6% Which of the following statements best represents BergAwesome? (%)? (recurring content question) BergAwesome is an appropriate candidate for one seeking a little above average risk. BergAwesome is an appropriate candidate for an investor willing to bear average risk. None of the choices are correct. BergAwesome is an appropriate candidate for an investor seeking high risk. O BergAwesome is an appropriate candidate for an investor with low tolerance for risk.
B20 x✓ fx A B 5 Earnings 6 4 Shares Outstanding Dividends, Per Share (Just Paid) 7 Return on Equity 8 Beta 9 10 Market Data 11 Market Return 12 Risk-Free Rate 13 25,000,000 $50,000,000 $1.25 0.15 1.35 Expected Return 0.12 0.03 14 Required: 15 16 Using the information in the tables above, complete the necessary steps to calculate the P/E ratio and the PEG ratio. 17 (Use cells A4 to B12 from the given information to complete this question.) 18 19 The M. Smith and Family Corporation 20 Capitalization Rate 21 Earnings Per Share 22 Plowback Rate 23 Sustainable Growth Rate 24 Price 25 P/E Ratio 26 Sustainable Growth Rate (as Percentage, use for PEG Calculation) 27 PEG Ratio 28 29 Calculations $2.00 0.375 0.056 5.625
Problem 8-14 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 4.0% +0.50RM + eA RB = -1.2% + 0.70RM + eB OM 17%; R-squareд = 0.26; R-squareg = 0.18 Assume you create a portfolio Q, with investment proportions of 0.40 in a risky portfolio P, 0.35 in the market index, and 0.25 in T-bill. Portfolio Pis composed of 70% Stock A and 30% Stock B. a. What is the standard deviation of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Standard deviation 10.98 c. What is the "firm-specific" risk of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 4 decimal places.) Firm-specific % Answer is complete but not entirely correct. 0.0025 x
N3

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