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Looking at a list of beta coefficients you spot a number of stocks as possible buys for your new stock portfolio. You have $80,000 to invest. You have decided to have just three stocks in your portfolio (this will make it easier to follow than a portfolio of more stocks). You have selected two already: GE with a beta of 1.40 and Bank of America with a beta of 1.78. You have invested $20,000 in each. For the final selection you are looking at Ford with a beta of 1.56, JP Morgan Chase with a beta of 1.64, Intel with a beta of 0.99 and PepsiCo with a beta of 0.35. You would like the overall beta of your portfolio to be as close to "the market" or "average stock" as possible.
Make your third selection and calculate the beta of your three-stock portfolio
(Include formula)
The Board of Directors of BesTaste, a medium size company, wants catering business that has been growing over the past six years. The local authority has permission to extend its current premises. The company granted the business assets. Explain whic..
Which of these may lawfully be used as part of a loan application evaluation process?
Disney enterprises issued 7.55% senior debentures (bonds) on July 15, 1993, with a 100-year maturity (ie due on July 15, 2093). Suppose an investor purchased one of these bonds on July 15, 2003 for $1,050.
What is the unlevered cost of equity for a firm composed of 50% debt and 50% equity, a Wacc of 14% and a cost of debt of 8%. the tax rate of 39%
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Project K costs $50,000, its expected cash inflows are $14,000 per year for 6 years, and its WACC is 10%. What is the project's NPV? Project K costs $53,364.04, its expected cash inflows are $11,000 per year for 10 years, and its WACC is 13%. What i..
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Crown Co. is expecting to receive 100,000 British pounds in one year. Crown expects the spot rate of British pound will decrease in a year, so it decides to avoid exchange rate risk by buying a put option. The strike price of put option is $1.53 per ..
You are purchasing a bond with face value 1000 a coupon rate 12% paid semi annually and a maturity of 15 years. Investors are seeing 10% yield to maturity. What must you pay for it today? You own a physical therapy clinic and come upon some exercise ..
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