The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%. Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

Question

Want to see the full answer?

Answer 1

Question

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

A company currently pays a dividend of $3.6 per share (D0 = $3.6). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 8.5%, and the market risk premium is 4.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

I have attatched two related pictures to calculate a value of a compay using a DCF model. Please show how to get residual value like in the picture shown.

A company currently pays a dividend of $3.6 per share (D0 = $3.6). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 8.5%, and the market risk premium is 4.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

Answer 2

Question

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Answer 6

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

Answer 7

Chapter 24, Problem 15PS

A

Summary Introduction

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

Answer 8

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Answer 9

B

Summary Introduction

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 13

Ch. 24 - Prob. 1PS Ch. 24 - Prob. 2PS Ch. 24 - Prob. 3PS Ch. 24 - Prob. 4PS Ch. 24 - Prob. 5PS Ch. 24 - Prob. 6PS Ch. 24 - Prob. 7PS Ch. 24 - Prob. 8PS Ch. 24 - Prob. 9PS Ch. 24 - Prob. 10PS

The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%. Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

Solution Summary: The author calculates the value of alpha on the basis of manager's portfolio, based on beta, T-bill return, and market return value.

Concept explainers

Videos

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Want to see the full answer?

Chapter 24 Solutions

The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%. Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

Solution Summary: The author calculates the value of alpha on the basis of manager's portfolio, based on beta, T-bill return, and market return value.

Concept explainers

Videos

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%. Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat. Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.

Want to see the full answer?

Chapter 24 Solutions

To calculate: The value of alpha on the basis of manager’s portfolio. When the T-bill rate was 6%, market return was 14% and portfolio manager with beta of 0.5 having return of 10%.

Introduction: The value of alpha depends on the value of beta, T-bill return, and market return value.

To explain: Effect of the alpha value on the performance of portfolio when the security market line is too flat.

Introduction: When it comes to performance analysis, then beta value gives a high imact on performance.