There is evidence that stock prices of Brexiax Co. fell when the firm announced of 12% profit increase in the fourth quarter (Q4). Does this evidence contradict the efficient market hypothesis? Discuss. Can i get help for this question please?
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There is evidence that stock prices of Brexiax Co. fell when the firm announced of 12% profit increase in the fourth quarter (Q4). Does this evidence contradict the
Can i get help for this question please?
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- If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company. Year 1 $ 62.18 40.30 2.35 a. High target price b. Low target price Year 2 $67.29 43.18 2.58 Year 3- $74.18 39.27 2.73 Year 4 $78.27 46.21 High price Low price EPS Earnings are expected to grow at 9 percent over the next year. 6. What is the high target stock price in one year? 32.16. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. b. What is the low target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 2.890Please help me with this problem. I have done it by myself too, but I just want to know that if -8% is the smallest number, do we subtract by -8%, right? You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past 5 years: 2%, -8%, 24%, 19%, and 12%. b. Suppose the average T-bill rate over this period was 4.2%. What was the average risk premium on the stock? I will also attach an image of my work. It's in the top right with a heading of Risk Premium. Thank YouSituation: Your friend came to you for advice whether or not to invest in a particular stock which promises a profit of Php200,000 a year with a probability of 30% or take a loss of Php50,000 with a probability of 70%. Your advice must be anchored on the expected gain based on the information provided by your friend. Prepare a very simple report to be discussed with your friend. You may follow the suggested format below. Advice: Invest/Do not invest Expected Profit: Php_ Computations:
- 4. Measuring standalone risk using realized data Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Five years of realized returns for Blue Llama Mining Inc. (Blue Llama) are given in the following table: 2016 2017 2018 2019 Stock return 10.00% 6.80% 12.00% 16.80% Also note that: 2020 5.20% 1. While Blue Llama was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on Blue Llama's equity are calculated as arithmetic returns. Given this return data, the average realized return on Blue Llama Mining Inc.'s stock is The preceding data series represents a sample of Blue Llama's historical returns. Based on this conclusion, the standard deviation of Blue Llama's historical returns is If investors expect the average realized return on Blue Llama Mining Inc.'s stock…a) Assume that the risk free rate of return is 6%, the market expected rate of return is 10%. The standard deviation of the market return is 4% while the covariance of return for security A and the market is 3%. Compute the required rate of return on Security A? b) The Managing Directors of three profitable listed companies discussed their companiesdividend policies at a business lunch.Company A has deliberately paid no dividends for the last five years.Company B always pays a low dividend per share (after adjusting for the general price index) and offer regular bonus issues.Company C always pays a dividend of 50% of earnings after taxation. Each Managing Director is convinced that his company policy is maximizing shareholders wealth.Required:Discuss the dividend policies used by the three companies.If this company’s stockturn rate was 3.5 last year, is the stockturn rate calculated in the previous question better or worse? Discuss. (AACSB: Written and Oral Communication; Reflective Thinking)
- Investors expect a company to announce a 9 percent decrease in earnings, but instead the company announces a 1 percent decrease. If the market is semistrong-form efficient, which of the following should happen? a. The stock’s price rises because the earnings decrease was less than expected. b. The stock’s price stays the same because earnings announcements have no effect if the market is semistrong-form efficient. c. The stock’s price decreases slightly because the company had a slight decrease in earnings.As companies evolve, certain factors can drive sudden growth. This may lead to a period of nonconstant, or variable, growth. This would cause the expected growth rate to increase or decrease, thereby affecting the valuation model. For companies in such situations, you would refer to the variable, or nonconstant, growth model for the valuation of the company's stock. Consider the case of Portman Industries: Portman Industries just paid a dividend of $2.40 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year. Assuming that the market is in equilibrium, use the information just given to complete the table. Term Dividends one year from now (D1) Horizon value (P1) Intrinsic value of Portman's stock Value The risk-free rate (TRF) is 3.00%, the market risk premium (RPM) is 3.60%, and Portman's beta is 1.70.…Can small adjustments to a flow lead to large changes in a stock? Group of answer choices A.There is no way to determine if this is possible. B.Yes, given enough time. Even a small change in flow will accumulate over time. C.No. If the change in the flow is small, the change to the stock must also be small. D.Yes. If a penny is deducted from an account of $10,000, that change is large because every penny counts. E.No. Flows can’t change in small ways.
