Here are alphas and betas for Company X and Company Y for the 60 months ending April 2019. Alpha is expressed as a percent per month. A month later, the market is up by 5%, X is up by 6% and is up by 3%. (3a) What is the abnormal rate of return for X and Y? ] Alpha Beta X 0.57 1.08 0.46 0.65 The table below shows a condensed income statement and balance sheet for a plant. Income Statement Assets at 31 December 2018 Revenue 56.66 Net working capital 7.08 Raw materials cost 18.72 Operating cost 21.09 Depreciation Investment plant & equipment 69.33 4.50 Less accumulated depreciation 12.35 Net plant & equipment 21.01 Pretax income 48.32 Tax at 35% 4.32 Net income 8.03 Total assets 55.40 (3b) Calculate the plant's EVA. Assume the cost of capital is 9%. (3c) Assume now that the plant could be sold to another company for $95 million. How should this fact change your calculation of EVA? Explain your answer

Here are alphas and betas for Company X and Company Y for the 60 months ending April 2019. Alpha is expressed as a percent per month. A month later, the market is up by 5%, X is up by 6% and is up by 3%. (3a) What is the abnormal rate of return for X and Y? ] Alpha Beta X 0.57 1.08 0.46 0.65 The table below shows a condensed income statement and balance sheet for a plant. Income Statement Assets at 31 December 2018 Revenue 56.66 Net working capital 7.08 Raw materials cost 18.72 Operating cost 21.09 Depreciation Investment plant & equipment 69.33 4.50 Less accumulated depreciation 12.35 Net plant & equipment 21.01 Pretax income 48.32 Tax at 35% 4.32 Net income 8.03 Total assets 55.40 (3b) Calculate the plant's EVA. Assume the cost of capital is 9%. (3c) Assume now that the plant could be sold to another company for $95 million. How should this fact change your calculation of EVA? Explain your answer

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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Given the information below for Seger Corporation, compute the expected share price at the end of 2020 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2020. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year Price 2014 $97.50 EPS 3.15 2015 $103.40 3.86 2016 $102.10 2017 $ 99.60 2018 $121.10 2019 $136.50 4.66 5.36 7.25 8.25 CFPS 7.52 8.44 8.86 10.37 11.95 13.20 SPS 55.10 60.10 59.50 63.00 74.20 82.20 Using PE ratio Using P/CF ratio Using P/S ratio Share Price
Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year Price EPS CFPS SPS 2016 $65.90 2.75 8.07 42.30 Using PE ratio Using P/CF ratio Using P/S ratio 2017 $71.80 3.46 8.88 47.30 2018 $ 70.50 4.26 9.19 46.70 Share Price 2019 $68.00 4.96 10.92 50.20 2020 $ 89.50 7.80 12.28 61.40 2021 $ 104.90 8.80 13.42 69.40
Given the information below for HooYah! Corporation, compute the expected share price at the end of 2020 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2020. (Do not round intermediate calculations. Round your answers to 2 decimal places. Exclude negative annual PE and P/CFPS ratios from the average PE and average P/CFPS ratio calculations. When computing annual growth rates, use a positive sign on the annual rate of change if the per share value increased in value and use a negative sign on the annual rate of change if the per share value deceased in value.) Year Price EPS CFPS SPS 2014 $ 21.00 -5.00 -12.00 18.00 Using PE ratio Using P/CF ratio Using P/S ratio 2015 2016 $57.50 $129.00 -4.29 -9.50 26.50 -1.70 -2.70 24.60 Share Price 2017 $206.00 -.45 -.10 28.10 2018 $ 96.00 .05 .33 31.60 2019 $26.50 .06 .08 34.95
b. By what percentage did the net income grow each year? For example, revenues (increased or decreased) in 2013 x 10.02% however, cost of goods sold (declined or increased) by 7.70%. *Use the Data Table*
A stock has an abnormal return of -0,8% per month. What is the annualized abnormal return? The answer should be given in decimal form with three decimals (e.g., if the correct answer is 2.4% write 0.024)
The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively. What is the standard deviation of these returns? Group of answer choices 13.29 percent 14.14 percent 16.50 percent 17.78 percent 19.05 percent show your work please and let me know if we can solve it by financial calculator
This is the operating margin from 2015 to 2019: 2015: 23.33% 2016: 15.69% 2017: 18.15% 2018: 25.06% 2019: 16.82% What is the trend analysis for the operating margin ratio above? In general, why the operating margin of a company become decrease and increase?
Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year Price EPS CFPS SPS 2016 $ 55.10 2.60 7.62 26.20 Using PE ratio Using P/CF ratio Using P/S ratio 2017 $ 61.00 3.31 8.52 31.20 2018 $ 59.70 4.11 8.92 30.60 Share Price 2019 $ 57.20 4.81 10.47 34.10 2020 $ 78.70 7.35 12.01 45.30 2021 $94.10 8.35 13.24 53.30
Suppose a company's cost of goods sold for years 2 and 3 were $283,310 and $299,390 respectively. Also suppose that inventory had a balance of $34,740 at the end of year 1, $35,168 at the end of year 2, and $36,356 at the end of year 3. If the annual growth in total revenues is 8.42% for the foreseeable future, calculate the forecasted inventory balance at the end of year 5. Assume the same inventory turnover in all future years as that in year 3 calculated using the average asset balances. Also assume the same gross margin % in all future years as that in year 3. Note that year 3 is the latest year with reported results, while years 4 onwards are all forecasted years.
The analysis of Book Value Per Share is as follows: 2015: $158 2016: $158.53 2017: $163.80 2018: $164.28 2019: $170 a. What is the trend analysis for that BOOK VALUE PER SHARE and why it is increasing and decreasing?
Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year: Price EPS CFPS SPS 2016 $97.60 2.80 8.22 52.60 2017 $103.50 3.51 9.00 57.60 2018 $102.20 4.31 9.28 57.00 2019 $99.70 5.01 11.07 60.50 2020 $121.20 7.95 12.37 71.70 2021 $136.60 8.95 13.48 79.70
Assuming costs vary with sales and a 20 percent increase in sales is projected, create the pro forma income statement. Create a pro forma Balance Sheet. All items will vary with sales. What is the plug variable in order for this to balance? Suppose no dividend is planned to be issued next year. What is the plug variable?

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