Homework Help is Here – Start Your Trial Now!
Business
Finance
please

please

Essentials Of Investments
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
See similar textbooks
icon
Related questions
Question

question 4 please 

3. Consider a project with the following cash-flows: Time t=0 t=1 t=2 t=3 Cash-flow -10 2 3 What is the project's internal rate of return? A. 0.00% В. 7.58% C. 12.21% D. 14.21% E. None of the above 4. A share is currently trading at £555.56 and is expected to pay out a dividend of £100 in exactly a year's time. Its dividends are expected to grow at a constant rate thereafter. What is the value of the annual growth rate if you know that the market capitalization rate is 15% per annum? A. -3% per annum B. 0% per annum C. 3% per annum D. 4% per annum E. 5% per annum 5. What is the beta of a portfolio that has invested 10% in the riskless asset and the remainder in the following shares (assuming the answer is rounded to the nearest 2nd decimal)? Share % Invested Beta X 40% 2 Y 30% 1.5 20% 1.2 A. 1.59 В. 1.49 С. 1.18 D. 0.75 E. None of the above
Transcribed Image Text:3. Consider a project with the following cash-flows: Time t=0 t=1 t=2 t=3 Cash-flow -10 2 3 What is the project's internal rate of return? A. 0.00% В. 7.58% C. 12.21% D. 14.21% E. None of the above 4. A share is currently trading at £555.56 and is expected to pay out a dividend of £100 in exactly a year's time. Its dividends are expected to grow at a constant rate thereafter. What is the value of the annual growth rate if you know that the market capitalization rate is 15% per annum? A. -3% per annum B. 0% per annum C. 3% per annum D. 4% per annum E. 5% per annum 5. What is the beta of a portfolio that has invested 10% in the riskless asset and the remainder in the following shares (assuming the answer is rounded to the nearest 2nd decimal)? Share % Invested Beta X 40% 2 Y 30% 1.5 20% 1.2 A. 1.59 В. 1.49 С. 1.18 D. 0.75 E. None of the above
Expert Solution
Step 1

Formula to calculate the growth rate is:

P = D1

     k - g

Where P is the price of the stock

k is the rate of return & g is the growth rate

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Market Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS