You have assigned the following values to these three firms: 1 2 AENT 3 4 Ester Lauder Kimbo Realty Nordstream Ester Lauder Kimbo Realty Nordstream B Expected Dividend D Growth Current Price Estimate 16.50% 11.00% $ 1.70 $50.00 $ 1.68 $ 82.00 $ 0.60 $ 10.00 13.00% Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 6.40 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Required return - Required return - CGM CAPM % % % E % % % Beta 0.74 1.51 1.02

You have assigned the following values to these three firms: 1 2 AENT 3 4 Ester Lauder Kimbo Realty Nordstream Ester Lauder Kimbo Realty Nordstream B Expected Dividend D Growth Current Price Estimate 16.50% 11.00% $ 1.70 $50.00 $ 1.68 $ 82.00 $ 0.60 $ 10.00 13.00% Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 6.40 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Required return - Required return - CGM CAPM % % % E % % % Beta 0.74 1.51 1.02

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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what is the max price for investor 1 and investor 2. please show all steps to solve in excel and formula Investor A (small) Expected 1st year NOI: $2,100,000 Risk free: 2.50%Risk Premium: 5.00%Expected NOI growth: 2.50% Investor 2 (large) Expected 1st year NOI: $2,100,000.00 Risk free: 2.50%Risk Premium: 4.50%Expected NOI growth: 2.50%
Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock A B C D Dollar investment % $200,000 200,000 300,000 300,000 Beta 1.25 1.50 0.80 -0.25 Total investment $1,000,000 The market's required return is 9% and the risk-free rate is 5%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.
The cost of equity using the CAPM approach The current risk-free rate of return (rRF) is 3.86%, while the market risk premium is 6.63%. the Monroe Company has a beta of 0.92. Using the Capital Asset Pricing Model (CAPM) approach, Monroe's cost of equity is
You own the portfolio below, what is your expected return? % of Portfolio Expected Return 50% 15% 35% Stock PCBM NAV MB O 10.8% O 13.5% O 2.6% O 8.3% 19% -10% 8%
Calculate the weighted average expected return of the portfolio. Stock Investment Expected ReturnA $20,000 15%B $4,000 10%C $26,000 12%
Suppose the return of asset A to D, is given as follows: Asset 2018 2019 2020 2021 A 9% 10% -2 % 15% B 7% 10% 5 % 9% C -11% 20% 12% 8% D 10% 16% -5 % -8% Calculate the expected return of: a. One stock at a time b. Portfolio of A, B & D, and, B, D, & A c. Portfolio of A & B, and, D & B d. Portfolio of all the four stocks
You are given the following expected returns for a share under various scenarios. Scenario Probability Expected returnBoom16 % 34.6%Normal41 % 4.4% Recession 43% - 5.2% Calculate the expected return as a percent. Please enter the number as a percentage without the % sign (as you do for the interest rate in the calculator). For example, if your answer is 7.89%, then simply answer "7.89".
The investment funds for your company includes the following: Stock $ Amount Invested Beta for Each Stock A $ 600,000 .8 B $ 1,800,000 1.4 C $ 2,400,000 1.7 D $ 700,000 -.6 E $ 3,000,000 1.1 You need to calculate the required rate of return for the investment. The market’s required return for Year 2020 is 12% and the risk free rate is 3% Show your work on the following: Calculate the average beta for the portfolio. Calculate the required rate of return for the entire portfolio. The CFO of your company is anticipating that the stock market will be decreasing in the near future. Please give a recommendation on which stock the company should sell and which stock the company should buy. The CFO also wants you to explain your answer.
Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $300,000 1.2 B 200,000 1.6 C 400,000 0.75 D 100,000 -0.35 Total investment $1,000,000 The market's required return is 11% and the risk-free rate is 4%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.
Your investment over one year had a realized return of 9% and a dividend yield of 6%. If the sale price was $45 per share, what was the cost of the investment? Question 7 options: $45.00 $46.35 $43.69 $41.28 $44.21
Vijay
Given the following annual returns for Fort Corporation, Smith Industries and the market. Fort's Smith's Market Year Rate of Return (%) Rate of Return (%) Rate of Return (%) 2015 6 5 -3 2016 10 15 8 2017 11 15 20 2018 10 10 10 2019 13 10 5 Calculate the mean return of a portfolio formed from Fort stock and the Market (25% invested in Fort). 8% a. 8.5% 10.75% с. 40% d.

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