The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes thesestocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1stock split on January 1, 2020.Douglas McDonnellDynamics GeneralInternational RockwellNew divisorShares(millions)180325370Rate of return1/1/19$ 606897Price1/1/20$ 646486a. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.)1/1/21$7778100b. Calculate the rate of return on the index for the year ending December 31, 2020, if Douglas McDonnell's share price on January 1,2021, is $23.42 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 180 325 370 New divisor 1/1/19 $ 60 68 97 Price 1/1/20 $ 64 64 86 1/1/21 $77 78 100 6. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Calculate the rate of return on the index for the year ending December 31, 2020, If Douglas McDonnell's share price on January 1, 2021, is $23.42 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Suppose that Douglas McDonnell shareholders approve a 2-for-1 stock split on January 1, 2020. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 180 325 370 New divisor 1/1/19 $ 60 68 97 Price 1/1/20 $ 64 64 86 1/1/21 $77 78 100 6. What is the new divisor for the index? (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Calculate the rate of return on the index for the year ending December 31, 2020, If Douglas McDonnell's share price on January 1, 2021, is $23.42 per share. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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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Now suppose the stock price of Kaplin Incorporated throughout the four quarters in 2019 actually looks as follows: 100 90 80 70 60 50 40 30 20 10 0 o st. 1 Kaplin Incorporated Stock Price (2019) 2 3 5 (? Suppose you purchased 3,500 shares at the beginning of January (the beginning of Quarter 1) at the market price. If you decide that you made a mistake purchasing the stock and sell all of your shares once the price drops to $30, your profit will be Suppose you purchased an American-style put option for $4 per share with an exercise price of $35 that expires at the end of March. Given the strike price, and stock prices throughout the quarter, you ▼ exercise the put option because it is ▼. As a result, your profit will be $ (Hint: If you exercise the put option, assume you immediately purchase shares, at the lowest price in Quarter 1, that can then be resold using the put option.) Given each of your answers in this problem, and that investors are perfect call makers, what conclusion can…
Ralph is constructing a price-weighted index. On March 1, 2XX1, he has the following stocks in the index: Company Share price # shares outstanding Walmart $42.6 26,000 Kmart $18.76 19,000 Venture $55.11 63,000 Macy’s $39.61 45,000 What is the price-weighted index on March 1, 2XX1? (Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.167))
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Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You believe they should be $30 per share, and are thus overvalued. December 2023 put options on a strike price of $60 per share are currently valued at $5. Each put contract is based on 100 shares. a.) What is your net dollar profit or loss as a holder of the put contract (based ona contract size of 100 shares) if we arrive at expiry in December and you are wrong and Company B shares are selling for $100? (Show your working in full)
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Options were granted on January 1, 2023by Paltel Co. to purchase 15,000 common shares at an exercise price of $22. The average market price of Paltel's common stock during 2023 was $30 per share. Calculate the incremental shares (denominator) for these options on December 31, 2023. (When writing your answer, do not use commas (,) or the dollar sign ($). For example, if your answer is $10,000 write it as 10000). Answer:
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Graphical Designs is offering 15-15 preferred stock. The stock will pay an annual dividend of $15 with the first dividend payment occurring 15 years from today. The required return on this stock is 4 45 percent What is the price of the stock today? Mutiple Choice O O O $10324 $33708
The following three defense stocks are to be combined into a stock index in January 2022 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. Douglas McDonnell Dynamics General International Rockwell Shares (millions) 215 455 1/1/22 $ 64 Price 1/1/23 1/1/24 72 . $ 68 64 $ 82 78 250 101 90 106 a. Calculate the initial value of the index if a value-weighting scheme is used. Note: Round your answer to 2 decimal places. Index value 49,045.00 b. What is the rate of return on this index for the year ending December 31, 2022? For the year ending December 31, 2023? Note: A negative valué should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 2022 return 2023 return
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Options were granted on January 1, 2023by Paltel Co. to purchase 15,000 common shares at an exercise price of $22. The average market price of Paltel's common stock during 2023 was $30 per share. Calculate the incremental shares (denominator) for these options on December 31, 2023.
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