Reference no: EM13333361
1. You have $100,000 to invest in a portfolio containing stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 11.22 percent and that has only 96 percent of the risk of the overall market. If X has an expected return of 15.35 percent and a beta of 1.55, Y has an expected return of 9.4 percent and a beta of .7, and the risk-free rate is 4.5 percent, how much money will you invest in Stock X? How do you interpret your answer?
2. Find the WACC. Given the following information for Huntington Power Co., find the WACC. Assume the company's tax rate is 35 percent. Debt: 5,000 6% coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 105% of par; the bonds make semiannual payments. Common stock: 175,000 shares outstanding, selling for $58 per share; the beta is 1.10. Market: 7% market risk premium and 5% risk-free rate.
3. Preferred Stock and WACC. The Saunders Investment Bank has the following financing outstanding. What is the WACC for the company? Debt: 60,000 bonds with a coupon ratre of 6% and a current price quote of 109.5' the bonds have 20 years to maturityh. 230,000 zero coupon bonds with a price quote of 17.5 and 30 years until maturity. Preferred stock; 150,000 shares of 4 % preferred stock with a current price of $79, and a par value of $100. Common stock: 2,600,000 shares of common stock; the current price is $65, and the beta of the stock is 1.15. Market: The corporate tax rate is 40%, the market risk premium is 7%, and the risk-free rate is 4%.
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Explain chloroform and chcl3 immiscible or miscible
: Predict whether each of the following solvents is miscible or immiscible with hexane,C6H14. 1.) formic acid, HCOOH immiscible or miscible 3.) methyl ethyl ketone, C4H8O immiscible or miscible 2.) methanol CH3OH immiscible or miscible 4.) chlorofor..
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Determine his speed at the bottom of the swing
: Tarzan swings on a 31.0m vine initially inclined at an angel of 28.0 degrees to the vertical. What is his speed at the bottom of the swing if he pushes himself with a speed of 2.5m/s
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Determine what was the earnings per share for the year 2010
: allen lumber company had earnings after taxes of $547,000 in the year 2009 with 400,000 shares outstanding. on january 1, 2010, the firm issued 26,000 new shares.
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Find the speed of the cab just before it hits the spring
: he cable of the 1400 kg elevator cab in the figure snaps when the cab is at rest at the first floor, Find the speed of the cab just before it hits the spring
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Determine what is the wacc for the company
: Assume the company's tax rate is 35 percent. Debt: 5,000 6% coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 105% of par; the bonds make semiannual payments.
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Depict the organic product formed when ch3ch2c
: Draw the organic product formed when CH3CH2C(triple bond)C-Na+ reacts with (CH3)2CHCH2CH2Cl
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Find the magnitude of the acceleration of the boxes
: Two boxes of masses m1 = 20.0 kg and m2=40.0 kg are connected by a rope through a pulley that has a uniform wheel of mass M=10.0 kg
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Write forensic analysis for the windows 7 os
: Download one of the forensic tools at http://forensiccontrol.com/fcresources.php, run it on Windows 7 OS, make up exercises that will test its capabilities and evaluate it. Write a one-page report on its potential use in forensic analysis for the ..
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Determine what is the current maket price of bond
: A bond has a face value of $100,000 and a cupon rate of 5 %. What is the current maket price of bond. if the market rate is 6.25% interest rate, the bond pays interest annually and matures in 8 yr
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