Galacia Rolls Sep 18 8:48am Hello Class, With stocks, you can buy a part of the corporation, which sounds awesome. And you can only lose your investment if the corporation goes bankrupt (which is still bad). I mostly hear from my friends about dividend stocks because they pay you dividends every quarter. I think that is awesome, but to receive a significant amount of dividends, you need to invest a significant amount of capital in the same stock. Stocks are liquid too, which means you can buy or sell them easily. There are stocks that are more volatile than others, which means that they tend to increase in price and decrease rapidly. These types of stocks are riskier than other stocks whose volatility is lower. I have started to invest in a few popular mutual funds in Robinhood, but I am hesitant to invest in stocks mainly because the mutual funds diversify my investment while stocks do not diversify my investment.

Galacia Rolls Sep 18 8:48am Hello Class, With stocks, you can buy a part of the corporation, which sounds awesome. And you can only lose your investment if the corporation goes bankrupt (which is still bad). I mostly hear from my friends about dividend stocks because they pay you dividends every quarter. I think that is awesome, but to receive a significant amount of dividends, you need to invest a significant amount of capital in the same stock. Stocks are liquid too, which means you can buy or sell them easily. There are stocks that are more volatile than others, which means that they tend to increase in price and decrease rapidly. These types of stocks are riskier than other stocks whose volatility is lower. I have started to invest in a few popular mutual funds in Robinhood, but I am hesitant to invest in stocks mainly because the mutual funds diversify my investment while stocks do not diversify my investment.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter9: Stocks And Their Valuation

Section: Chapter Questions

Problem 9TCL

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Chapter 11, Question 4
#9 Cost of equity
The Financial Sector-End of Chapter Problem You are discussing buying stocks with a friend and mention that you want to buy a few shares of Amazon stock. Your friend says that's a terrible idea because Amazon has never paid dividends to its shareholders so you would never receive any of Amazon's profits or make any money off the stock. What might you say to your friend to defend your desire to purchase a few shares of Amazon stock? You explain that the price of Amazon stock will always have to rise because dividends are not paid. the fundamental value of the stock is not determined by the dividends paid, but by the present value of future profits. purchasing stock is better than purchasing bonds because stockholders are the first in line to get paid if the company goes bust. buying a few shares will give you a significant say in how Amazon will be run in the future.
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Chapter 11, Question 5. This is a follow up from previous question
A Moving to another question will save this response. Question 9 Corporate bonds Ore lables on the balance sheet Owe riskier than the firm's preferred stock O are ued as a method of providing additional equity funding for a firm O are less risky than the firm's common stock O Al of the listed items are correct AMoving to another question will save this response. MacBook Air SO 5 8 E Y. D F G H C V %24
Chapter 11, Question 5. Two parts :)
MINDTAP Q Search this course Zulaikha binti M ian 1 aining: 1:13:50 Save Submit Test for Gradi « Question 36 of 50 Which of the following statements is CORRECT? O a. Money markets are markets for long-term debt and common stocks. O b. Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks. O c. The NYSE operates as an auction market, whereas NASDAQ is an example of a dealer market. d. While the distinctions are becoming blurred, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other partles. O e. A liquid security is a security whose value is derived from the price of some other "underlying" asset. N W. > 低日见里 be here to search
Effects of a Stock Exchange [LO3] Consider the following premerger information about Firm A and Firm B: Total earnings Shares outstanding Price per share Firm A $4,350 1,600 $ 43 Firm B $1,300 400 $ 47 Assume that Firm A acquires Firm B via an exchange of stock at a price of $49 for each share of B's stock. Both Firm A and Firm B have no debt outstanding. a. What will the earnings per share (EPS) of Firm A be after the merger? b. What will Firm A's price per share be after the merger if the market incorrectly analyzes this reported earnings growth (that is, the price-earnings ratio does not change)? c. What will the price-earnings ratio of the postmerger firm be if the market cor- rectly analyzes the transaction? d. If there are no synergy gains, what will the share price of Firm A be after the merger? What will the price-earnings ratio be? What does your answer for the share price tell you about the amount Firm A bid for Firm B? Was it too high? Too low? Explain.
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Styles QUESTION 3 Alan, a chartered financial analyst (CFA), is willing to invest two stocks, Bloom stock and Stars stock. He has collected the data on both stocks from Bursa Malaysia. The data as follows: Stock Stock Bloom Stars State of Probability Return (%) Return (%) Economy Recession 0.35 -20 30 Normal 0.40 10 20 Boom 0.25 70 50 Alan has RM100,000 and he plans to invest RM60,000 in Bloom and the remainder in Stars. The market price for Bloom and Stars are RM12 and RM25 respectively. Beta for each stock is 1.2 and 0.5. Required: C. If Alan decide to invest all 100% in Bloom stock, criticise your findings. w ww m D. Evaluate the beta portfolio and each of the stocks. Assess the riskiness of the stocks based on standard deviation and the beta.
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