Suppose you invest $22,500 by purchasing 200 shares of Abbott Labs (ABT) at $55 per share, 200 shares of Lowes (LOW) at $35 per share, and 100 shares of Ball Corporation (BLL) at $45 per share.The weight of Abbott Labs in your portfolio is:A. 39.11%B. 19.56%C. 48.89%D. 29.33%

COMPANY SHARE SHARE PRICE ABBOTT LABS 200 55 LOWES 200 35 BALL CORPORATION 100 45

Answered: Suppose you invest $22,500 by…

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

Similar questions

ABC Inc needs to raise $500 million, Current Stock price is $72.50, underwriter requirement 7.5%, underpricing requirement is 6.00% a. What is the spread? b. What is the underprice? c. How many shares must the company need to sell? d. If the net amount needed is $500 million what are the gross proceeds?
An investor is considering investing in the following two shares: Beta Fortress plc. 1.4 Castle plc 0.5 A) if the return on treasury bills is 5% and the market risk premium is 10%, what is the expected return of a portfolio made up of 40% fortress shares and 60% of castle shares? B) explain beta in the context of the CAPM and explain what the betas for fortress and castle shares imply about those shares C) shares in the empire plc have a beta of 0.9 and are expected to have a return of 16%. Given the information in part A are empire shares correctly priced according to the CAPM? Explain your answer and what is likely to happen to the shares in Empire PLC. D)explain what to the market risk premium and risk free rate of return in the CAPM represent. E)rxplain why it is difficult to empirically test the CAPM.
You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.56 million shares. The VC offers $1.03 million for 820,000 new shares. b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?
1.
You own 350 shares of Maslyn Tours stock that sells for $52.48 per share. If the stock has a dividend yield of 2.4 percent, how much do you expect to receive next year in dividend income from this investment? Multiple Choice $468.38 $489.81 $429.35 $455.53 $440.83
To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data about the company's stock: D1 $1.45; PO = $25; and g = 6.50% (constant). What is the cost of common from issuing new stock, assuming the flotation cost is 10% of the stock price? = 13.59% 11.10% 12.94% 11.68% 12.30%
Assume perfect markets. TMX Corporation has 4 million shares outstanding and a share price of $50 per share. TMX wants to repurchase 1 million shares. What would be the share price immediately after they repurchase the shares? $37.50 $50.00 $66.67
XYZ is comparing two different capital structures. Plan I would result in 13,000 shares of stock and $130,500 in debt. Plan II would result in 10,000 shares of stock $243,600 in debt. The interest rate on the debt is 10%. a). Ignoring taxes, compare plans I and II to an all equity plan assuming that EBIT will be $56,000. The all equity plan will result in 16,000 shares of stock OUTSTANDING. Which of the 3 plans has the highest EPS? And which has the lowest? b). In part A, what are the break-even levels of EBIT for plan I compared to an all equity plan? What about for plan II I compared to an all equity plan? Is one higher than the other? Why (explain). c). Ignoring taxes, when will EPS be identical for plans I and II?
To set up a $17,600 portfolio, Yolanda Kettle can invest in Kroger, E(R) = 10.1%, and in Logitech, E(R) = 13.7%. How much will Yolanda allocate to Kroger if she wants her portfolio to have an E(R) = 11.1%? a. $12,711.11 b. $6,518.52 c. $4,888.89 d. $11,651.85 e. $4,277.78

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

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…

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

Suppose you invest $22,500 by purchasing 200 shares of Abbott Labs (ABT) at $55 per share, 200 shares of Lowes (LOW) at $35 per share, and 100 shares of Ball Corporation (BLL) at $45 per share. The weight of Abbott Labs in your portfolio is: A. 39.11% B. 19.56% C. 48.89% D. 29.33%