Analysis of the prospects for the geriatric toy store

Assignment Help Finance Basics
Reference no: EM132485159

On January 1, Pina Inc. completed its analysis of the prospects for the Geriatric Toy Store and concluded that there was a 30-percent chance the stock price would be $145 in one year and an 70-percent chance the stock price would be $195. Six months later, Pina Inc. revised its estimated probabilities to a 45-percent chance of a stock price of $145 and a 55 percent chance of $195. If the market agrees with Pina Inc.'s revised probabilities, what is the expected change in stock price from January 1 to July 1? Assume the discount rate is zero. (Round answer to 2 decimal places, e.g. 15.25.)

Reference no: EM132485159

Questions Cloud

What is the appropriate proportion of equity : What is the appropriate proportion of equity to use in the WACC calculation?
How would prepare journal entries for each transaction : How would prepare journal entries for each transaction? Jan Haley owns and operates Haley's Dry Cleaners. The occurred during December
Determining the expected return on portfolio-bu hotel inc : BU Hotel Inc. has a beta of 2.6 and SHA Hotel Inc. has a beta of 0.90. The return on the market is 10% and the risk-free rate is 3%. If you wish to hold
What is the equipment after-tax net salvage value : The used equipment can be sold today for $5.2 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value?
Analysis of the prospects for the geriatric toy store : On January 1, Pina Inc. completed its analysis of the prospects for the Geriatric Toy Store and concluded that there was a 30-percent chance the stock price
How much principal have paid over the first nine year : You make quarterly? (end-of-quarter) payments of ?$2137.52. The loan is amortized over 25 years. How much principal have you paid over the first 9 ?years?
Determining the price of a share of sheridan mechanical : Sheridan Mechanical Inc.'s first dividend of $2.3 per share is expected to be paid six years from today. From then on, dividends will grow by 10 percent
How much must martin provide to fund the bequest : In the first? year, and will grow by 6?% per? year, forever. If the interest rate is 11?%, how much must Martin provide to fund this? bequest?
Estimating the rate of return for investment : Assume that at the beginning of the year, you purchase an investment for $8,300 that pays $186 annual income. Also assume the investment's value

Reviews

Write a Review

Finance Basics Questions & Answers

  What is value of the bonds

Suco co needs $800,000 to develop a plant. It issues a $1,000 par value bond with a coupon rate of 12 percent and 15 years maturity. The investors rate of return of 12 percent.

  How religion performs both manifest and latent functions

Can you provide examples of how religion performs both manifest and latent functions?

  Which asset have a greater annual straight-line depreciation

Asset B will have a useful life of 6 years and cost $1.3 million; it will have installation costs of $180,000 and a salvage or residual value of $300,000. Which asset will have a greater annual straight-line depreciation?

  Calculate the approximate cost of giving up the cash

Calculate the approximate cost of giving up the cash discount from each supplier. If the firm needs short-term funds, which are currently available from its commercial bank at 16%, and if each of the suppliers is viewed separately, which, if any, of ..

  Why does the fed monitor the economy

Why does the Fed monitor the economy? - What actions can the Fed take to affect the overall health of the economy?

  Explain the impact on the banks net interest income

Explain the impact on the bank's net interest income of interest rates increasing by 1% every year for the next three years.

  Review the given transactions affect stockholders equity

Refer to the information in E10-6. In its first year of operations, Finishing Touches has income of $150,000 and pays dividends at the end of the year.

  Adjusted closing prices on stock

What is the total return on your portfolio given the following adjusted closing prices on each stock (please enter the answer in percent format

  How bretton woods affect ability of foreign exchange rates

How did the Bretton Woods and the Smithsonian Agreements affect the ability of foreign exchange rates to float freely?

  Charges of age discrimination

What types of policies might lead to charges of age discrimination, and how can they be changed to eliminate these problems?

  What factors would increase or decrease price-to-book ratio

Discuss why book value and market value are not the same. What factors would increase or decrease the price-to-book ratio? How could the nature of the business or the health of the economy affect the ratio?

  Component cost of debt for use in the wacc calculation

The bond currently sells for $925 and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd