The stock which has the higher standard deviation.

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Answer 1

Question

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

b)

Summary Introduction

To determine: The stock which has the higher beta.

c)

Summary Introduction

To determine: The stock which is more risky.

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General Finance Question

Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet Sales Costs $ 40,000 Assets 34,160 $26,000 Debt Equity $ 7,000 19,000 Net income $ 5,840 Total $26,000 Total $26,000 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Sales Costs $ 48000 40992 Assets $ 31200 Pro forma balance sheet Debt 7000 Equity 19000 Net income $ 7008 Total $ 31200 Total 30304 What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) External financing needed $ 896

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Answer 2

Question

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

b)

Summary Introduction

To determine: The stock which has the higher beta.

c)

Summary Introduction

To determine: The stock which is more risky.

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Answer 3

Question

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

b)

Summary Introduction

To determine: The stock which has the higher beta.

c)

Summary Introduction

To determine: The stock which is more risky.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

b)

Summary Introduction

To determine: The stock which has the higher beta.

c)

Summary Introduction

To determine: The stock which is more risky.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

b)

Summary Introduction

To determine: The stock which has the higher beta.

c)

Summary Introduction

To determine: The stock which is more risky.

Answer 6

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

Answer 7

Chapter 8, Problem 8.19P

a)

Summary Introduction

To determine: The stock which has the higher standard deviation.

Answer 8

b)

Summary Introduction

To determine: The stock which has the higher beta.

Answer 9

b)

Summary Introduction

To determine: The stock which has the higher beta.

Answer 10

c)

Summary Introduction

To determine: The stock which is more risky.

Answer 11

c)

Summary Introduction

To determine: The stock which is more risky.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 8.1 - What is risk in the context of financial decision...Ch. 8.1 - Prob. 8.2RQ Ch. 8.1 - Compare the following risk preferences: (a) risk...Ch. 8.2 - Explain how the range is used in scenario...Ch. 8.2 - Prob. 8.5RQ Ch. 8.2 - Prob. 8.6RQ Ch. 8.2 - What does the coefficient of variation reveal...Ch. 8.3 - What is an efficient portfolio? How can the return...Ch. 8.3 - Prob. 8.9RQ Ch. 8.3 - How does international diversification enhance...

The stock which has the higher standard deviation.

Solution Summary: The author explains that panel A is a cyclical industry which makes machine tools and related heavy equipment, while panel B uses the biotechnology for developing the new pharmaceutical compounds.

To determine: The stock which has the higher standard deviation.

To determine: The stock which has the higher beta.

To determine: The stock which is more risky.

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Chapter 8 Solutions