Projections for a firm whose stock you wish to value:Years 1-6EPSPayout RatioStock's beta isYTM on T-bond isStock premium is1.260.271. What is the stock's value?A Between 15.00 and 23.00B Between 23.00 and 27.00C Between 27.00 and 31.00D Between 31.00 and 40.000.64.3%5.0%Years 7-134.970.36Discount the projected dividends at the required rate of return to estimatethe stock's value. Only use years 1-24 in your computations.Years 14 - 246.910.422. Please go back to the original story. Suppose the stock becomes less riskyfrom an investor's view. For instance, suppose its beta is now 0.80If there are 90,000,000 shares outstanding, what is the impacton the market value of the firm? Hint: first find the new stock price,then compute how it changed, and multiply that change by thenumber of shares outstanding.A up between 0 and 160,000,000B up between 160,000,000 and 500,000,000C down between 0 and 160,000,000D down between 160,000,000 and 500,000,000

The solutions to the two parts of the question have been analyzed in the explanation section…

Answered: Projections for a firm whose stock you…

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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Review the following market information: Current Stock Market Return 11.25% Current T-Bill Price $979.43 Historic T-Bill Average Return 2.80% Historic Stock Market Average Return 8.10% Stock Beta 1.23 What is the required return (rounded to two places)?
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What is the most you should be willing to pay for the stock in the table? Expected Expected Price in 1Dividend in 1 year Required Current Return Price Year $376.29 $3.91 5.80% $89.00
What is the expected return of a portfolio consisting of $6,000 stocks G and $4,000 stock H ? State of Probability of Returns if State Occurs Economy State of Economy Stock G (" Stock H ")/(11%) Boom 22% 14% 1% Normal 78% 7% 9% a. 7.2% b. 7.6% c. $7.9% d. 8.3% e. $8.9% 33. Joel Foster is the portfolio manager of the SF Fund, a $1 million hedge fund that contains the following stocks. The required rate of return on the market is 10% and the risk-free rate is 4%. What rate of return should investors expect (and require) on this fund? Stoo Amount bar(A) 270,000 B 330,000 1.4 bar(C) 400,000 0.7 $1,000,000 a. 8.756% b. 9.382% c. 9.921%
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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Question 1 The following are the monthly rates of returns for two stocks, Stock A and Stock B over 2022. Month 1 2 3 4 5 6 7 8 9 10 11 12 Stock A 2.52% -3.2% 0.54% 1.32% 2.56% 1.10% 1.85% 0.58% 1.98% 0.05% 1.15% 2.23% Stock B 1.37% Page 3 of 5 1.58% 0.98% -0.78% 0.98% 1.35% -2.04% 0.87% 2.09% -0.07% 1.78% 0.63% (a) What is the average monthly rate of return for each stock? What is the standard deviation of returns for each stock? (b) Calculate the covariance between the rates of return. Calculate the correlation coefficient between the rates of return. ortfolio Analysis (c) Comment on the diversification benefits of constructing a portfolio of these two stocks.
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.
Estimated rate of return for Stock shareholders A B Estimated price in T1 4 4 Estimated dividend in T1 0,2 12% 15% 0,5 Calculate, for both stocks, the equilibrium price in TO. With a market rate of return of 6% and a risk free rate of 1,5%, calculate the Beta of the two stocks. Which percentage of stock A and B should you buy in your portfolio so as to generate a rate of return of 13,25%? What would be the beta of this portfolio?
nabled: Final A stock had the following year-end prices and dividends: Year 0 1 2 3 Price $61.03 73.50 63.30 74.38 Multiple Choice O What was the arithmetic average return for the stock? O 9.23% O 18.11% Dividend 18.01% $ 1.33 1.71 1.68 Saved

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