User Account

All Pages

Determine the coefficient of variation for each stock

Assignment Help Financial Accounting
Reference no: EM132845394

Question - Silver Industries Company "Y" shares have an expected return of 15%, a beta coefficient of 0.8, and a standard deviation of expected returns of 31%. The company's Z shares have an expected return of 11.3%, a beta coefficient of 1.5, and a standard deviation of 25%. The risk-free rate is 5% and the market risk premium is 4%.

Required -

a. Determine the coefficient of variation for each stock.

b. Explain which action is riskier for diversified investors.

c. Calculate the expected rate of return for both stocks.

d. Explain which of the stocks might be more attractive to investors.

e. Calculate the return on a portfolio that has $ 9,200 invested in Stock "Y" and $ 3,500 invested in Stock "Z".

F. Suppose the market risk premium increases to 7%, which of the stocks would have a higher return?

Reference no: EM132845394

Questions Cloud

What is the gross profit : Dallas Company had NET sales of $800,000 for the year, cost of goods sold of $400,000, and interest expense of $100,000 for last year. What is the Gross Profit
What does the fourteenth amendment do : Consider the differences between the Thirteenth and Fourteenth Amendments. What does the Fourteenth Amendment do that Thirteenth does not?
What is the chance that you take out all of the white marble : There are 3 white marbles and 1 black marble in a bag. You take one marble at a time out of the bag and do not put it back in.
How the appearance of the plots changes : In the bottom 4 panels, display plots for samples of size 1000. Comment on how the appearance of the plots changes as the sample size changes.
Determine the coefficient of variation for each stock : Silver Industries Company "Y" shares have an expected return of 15%, a beta coefficient of 0.8, Determine the coefficient of variation for each stock
Calculate the proportion of students consume : Calculate the proportion of students consume more than 12 instant meals per month?
What was the view of the riots in the south : What do you think accounts for the differences in information given to the public and the tone of the articles? What was the view of the riots in the South
What were forces that led lincoln to issue emancipation : A civil war caused Lincoln to finally hurl an executive fist at slavery. What were these forces that led Lincoln to issue his Emancipation Proclamation?
Why did you select the particular five pieces : Why did you select these particular five pieces? What connections did you make between these pieces? How do you hope viewers will make these connections?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare bank reconciliation and journalize the entries

A check for $72 for supplies was recorded as $27 in the ledger. Prepare bank reconciliation and journalize the entries

  For corporations-capital losses are deductible

What item from the company’s records must be added to the bank balance when reconciling the bank statement? For corporations, capital losses are deductible:

  What is the amount of the tax shield on that debt

Sterling Ltd, What is the amount of the tax shield on that debt, just for this year, if Sterling is subject to a 30 per cent company tax rate?

  Calculate the value of bond that matures in nineteen years

Calculate the value of a bond that matures in 19 years and has a $1,000 par value. The annual coupon interest rate is 16 percent

  Find out the cash flows associated with the decision given

Find out the cash flows associated with this decision given that the tax rate applicable to the firm is 40%. ABC and Co. is considering a proposal to replace

  What is the pv of the debt tax shield

If a company issues 52,500 rupees worth of debt and has a corporate tax rate of 35%, what is the PV of the debt tax shield? 52500

  Risk and security and identification their role in finance

Definition of Risk and Security and identification their role in finance.

  Estimate standard deviation and variance in annual returns

The following table lists the stock prices for Microsoft from 1989 to 1998. The company did not pay any dividends during the period.  Estimate the average annual return you would have made on your investment. Estimate the standard deviation and varia..

  How much was the cash outlay for the new equipment

Maz sold for $3,000 the old equipment that had an undepreciated cost of $2,500. Assuming a tax rate of 40-percent, how much was the cash outlay?

  What is happening in industry and in the wider community

What is happening in their industry and in the wider community that could impact on their budget. Where do they get this information

  Describes for saudi arabian organizations

Analyzes the outcomes AlShathry describes for Saudi Arabian organizations and how productivity is impacted. Make a recommendation

  Calculate the weights of debt

Use partial balance sheet to calculate the weights of Debt (Wd), Preferred equity (Wp), and Common Equity (We),Current liabilities $ 5,000,000

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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