Reference no: EM131446726
a) You hold $25,000 in Treasury Bills with your broker. You ask him to short 1,000 shares of Bomb-Bar-Day, and the stock’s current market price is $50. Your broker has a short sale maintenance margin of 30%. You will get a margin call if the stock ...
b) Black Kat Inc. is expecting a period of intense growth, so it has decided to retain more of its earnings to help finance that growth. As a result it is going to reduce its annual dividend by 10% a year for the next three years. After that it will maintain a constant dividend of $0.75 a share. The company just paid a dividend of $1.80 per share. What is the market value of this stock if the required rate of return is 13%?
c) The effective annual required rate of return on the ordinary shares of Southeast Corporation is 18%. The shares' expected dividend yield for year one is 4%. The shares' annual dividends are expected to grow at a constant annual rate forever. Whats the expected annual dividend growth rate?
d) You purchased a stock one year ago for $91.20. Today you sold the stock and realized a total return of –63.7% on your investment. During the year you received a total of $2.28 in dividends. At what price did you sell the stock?
e) Beaksley, Inc. is a very cyclical type of business which is reflected in its dividend policy. The firm pays a $2.00 a share dividend every other year. The most recent dividend was just paid today. Five years from now, the company is repurchasing all of the outstanding shares at a price of $50 a share. At an 8% rate of return, what is this stock worth today?
f) NanTech Corporation's next dividend is expected to be $1.75. Dividend growth has been a consistent 7% per year. If investors want a 12% return, determine the stock price 5 years ago.
|
Strength and weaknesses of company sales-profitability
: Choose a publicly traded company. Download the latest available financial reports (balance sheet, income statement, statement of cash flows, and statement of owners' equity). What is your overall opinion about the strength and weaknesses of this comp..
|
|
How much will each annual payment be
: You need to accumulate $119,538 for your son’s education. You have decided to place equal year-end deposits in a savings account for the next 17 years. The savings account pays 6.46 percent per year, compounded annually. How much will each annual pay..
|
|
Calculate the return on your investment in usd
: You have just sold shares in Credit Suisse, a Swiss firm, for CHF10,040 (or 10,040 Swiss Francs). You purchased this parcel of shares for CHF6,400. The spot rate is currently CHF/USD1.70 (or 1.70 Swiss Francs per US dollar). It was CHF/USD1.88 per do..
|
|
Annual interest rate and exchange rate
: At the start of 2006, the annual interest rate was 5 percent in the United States and 2.8 percent in Japan. The exchange rate was 95 yen per dollar at the time. Mr. Jorus, who is the manager of a Bermuda-based hedge fund, thought that the substantial..
|
|
Expecting a period of intense growth
: Black Kat Inc. is expecting a period of intense growth, so it has decided to retain more of its earnings to help finance that growth. As a result it is going to reduce its annual dividend by 10% a year for the next three years. After that it will mai..
|
|
Considering new three-year expansion project
: Mercy Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.85 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life.
|
|
What is the amount of each mortgage payment
: You purchased a piece of property for $1,056,000. The loan terms require monthly payments for 10 years at an annual rate of 4.75%. What is the amount of each mortgage payment?
|
|
What return are shareholders expecting
: A company recently paid a $1.15 dividend. The dividend is expected to grow at a 16.9 percent rate. At a current stock price of $45.87, what return are shareholders expecting?
|
|
Determine the current and predicted-revenues-variable costs
: Janet Gilbert is director of a lab. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs for these contracts are ..
|