S07Assg6

S07Assg6 - Fin 2200 CORPORATION FINANCE Sum 2007...

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Fin 2200 – CORPORATION FINANCE Sum 2007 Professors A. Dua Assignment #6 Note NOTE: This assignment is to be handed in! Only Questions 1, 2, and 4 will be marked The scores will only be given for the final answer 1. Bell Canada Enterprises (BCE) was priced at $34 per share one year ago when you bought 300 shares. It just paid a dividend of $5.50 per share. Your accountant has determined that you received a dollar return of $2.60 per share on your investment. Determine a) the current price per share. b) the percent return on your investment. c) what BCE’s risk premium was, if the risk-free rate over the year was 4.5% 2. In the last five years, Canadian Publishers Inc. (CPI) had the following returns: Year 1 2 3 4 5 Return 64% -32% 27% -13% 44% Determine a) the mean (arithmetic average) annual return. b) the 5-year holding period return. c) the 5-year holding period return expressed as an effective rate per year d) which of the above returns best indicates how a 5 year investment in CPI performed. e) the variance of the sample of yearly returns. f) the standard deviation of the sample of yearly returns. 3. Suppose market returns on Canadian stock and Canadian T-bill returns over the most recent 6-year period are as follows: Year Canadian Common Stock Canadian T-bills 1 -1.43% 6.65% 2 -8.61% 5.31% 3 10.81% 3.44% 4 22.18% 3.18% 5 19.47% 4.09% 6 26.58% 4.33% Current T-bill rates are 3%. Common shares for Mercury Aerospace Limited trade on the
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This note was uploaded on 04/06/2010 for the course ECON 2342 taught by Professor James during the Three '09 term at ADFA.

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S07Assg6 - Fin 2200 CORPORATION FINANCE Sum 2007...

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