The probability of receiving 14.7 percent or more return for long-term corporate bonds. Introduction: Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows: One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average. Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average. Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

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Answer 1

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Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

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(d) Estimate the value of a share of Cisco common stock using the discounted cash flow (DCF) model as of July 27, 2019 using the following assumptions Assumptions Discount rate (WACC) Common shares outstanding 7.60% 5,029.00 million Net nonoperating obligations (NNO) $(8,747) million NNO is negative, which means that Cisco has net nonoperating investments CSCO ($ millions) DCF Model Reported 2019 Forecast Horizon 2020 Est. 2021 Est. 2022 Est. 2023 Est. Terminal Period Increase in NOA FCFF (NOPAT - Increase in NOA) $ 1241 1303 1368 10673 11207 11767 1437 $ 12354 302 ✓ Present value of horizon FCFF 9918 9679 9445 ✔ 0 × Cum. present value of horizon FCFF $ 0 × Present value of terminal FCFF 0 ☑ Total firm value 0 ☑ NNO -8747 ✓ Firm equity value $ 0 ☑ Shares outstanding (millions) 5029 Stock price per share $ 40.05

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Answer 2

Question

Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

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Answer 3

Question

Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

Expert Solution & Answer

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Answer 4

Question

Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

Expert Solution & Answer

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Answer 5

Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

Answer 6

Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Answer 7

Chapter 12.4, Problem 12.4CCQ

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for long-term corporate bonds.

Introduction:

Standard deviation refers to the variation in the actual observations from the average. The probability of occurrence of values based on mean and standard deviation is as follows:

One standard deviation from the mean or average indicates that the values coming within the one standard deviation interval will have 2/3 or 68 percent probability of occurrence below and above the average.

Two standard deviations from the mean or average indicate that the values coming within the two standard deviations interval will have 95 percent probability of occurrence below and above the average.

Three standard deviations from the mean or average indicate that the values coming within the three standard deviations interval will have 99 percent probability of occurrence below and above the average.

Answer 8

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

Answer 9

Summary Introduction

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12.1 - Prob. 12.1ACQ Ch. 12.1 - Why are unrealized capital gains or losses...Ch. 12.1 - What is the difference between a dollar return and...Ch. 12.2 - Prob. 12.2ACQ Ch. 12.2 - Why doesnt everyone just buy small stocks as...Ch. 12.2 - What was the smallest return observed over the 88...Ch. 12.2 - About how many times did large-company stocks...Ch. 12.2 - What was the longest winning streak (years without...Ch. 12.2 - How often did the T-bill portfolio have a negative...Ch. 12.3 - Prob. 12.3ACQ

Solution Summary: The author explains the probability of receiving 14.7 percent or more return on long-term corporate bonds.

To determine: The probability of receiving 14.7 percent or more return for Treasury bills.

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Chapter 12 Solutions