TABLE I Large Caps Arithmetic Mean Annual Return Geometric Mean Annual Return Arithmetic Mean: Annual Excess Returns Std. Deviation of Excess Returns Sharp Index Wealth Creation 1961-70 9.04% 8.18% 4.77% 14.99% 0.318 $21,954 1971-80 10.34% 8.44% 3.55% 20.71% 0.171 $22,926 1981-90 14.63%...
Large Caps Arithmetic Mean Annual Return Geometric Mean Annual Return Arithmetic Mean: Annual Excess Returns Std. Deviation of Excess Returns Sharp Index Wealth Creation 1961-70 9.04% 8.18% 4.77% 14.99% 0.318 $21,954 1971-80 10.34% 8.44% 3.55% 20.71% 0.171 $22,926 1981-90 14.63% 13.93% 6.05%...
Have been having some trouble with a few of the questions on here...this is our practice final.
A specialist on the Arizona Stock Exchange is offering to buy a security for $37.50. A broker in Oklahoma City wants to sell the security for his client. The Intermarket Trading System shows a bid price of $37.375 on the NYSE. What should the broker do?
Buchanan Corp. is refunding $12 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium
Larry Corp.'s stock price is $12 per share. Curley Corp.'s stock price is $28 per share. Moe Corp.'s stock price is $50 per share. If a portfolio consists of 100 shares of each stock, what percent of the portfolio is comprised of Moe Corp? 1. 25% 2. 35% 3. 45% 4. 56% 5....
The covariance between Eb Corporation's common stock returns and the return on the market portfolio is 0.006. The standard deviation of the market is 0.3. What is the beta of Eb Corporation's common stock? 1. 0.02 2. 0.067 3. 0.087 4. 0.232 5. 0.334 Which of the...
Which one of the following is an example of systematic risk? 1. coal miners go on strike against Deep Vein Coal Company 2. Baker's Dozen experiences a kitchen fire which halts operations 3. inflation unexpectedly increases by 1.5 percent in the U.S. 4. government inspectors stop...
Which of the following are the risks that can be removed by diversification? Choose all that apply. 1. Diversifiable risk 2. Non-diversifiable risk. 3. Systematic risk 4. Firm-specific risk 5. Market risk he return on shares of Mass Company are predicted under the following...
A project has an NPV of $100,000 and is expected to last 4 years. Using a required rate of return of 10.00%, convert the NPV into an equivalent annuity. What's the annual payment of this annuity? 1. 16,335 2. 18,775 3. 19,889 4. 30,785 5. 31,547 Toyota Corp.'s stock...
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1. Can you help me with this valuation problem?: Imagine that you are trying to evaluate the economics of purchasing an automobile. You expect the car to provide annual after-tax cash benefits of $1,200 at the end of each year and assume that you can sell the car for after-tax proceeds of $5,000 at the end of the planned 5-year ownership period. All funds for purchasing the car will be drawn from your savings, which are currently earning 6% after taxes.
- a.Identify the cash flows, their timing, and the required return applicable to valuing the car.
- b.What is the maximum price you would be willing to pay to acquire the car? Explain.
2. How do you calculate the before tax-cost of the Sony bond and the after-tax cost of the Sony bond given the following information?:
- David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:
- Sony bond
- Par value $1,000 Coupon interest rate 6% Tax bracket 20%
- Cost $930 Years to maturity 10