Find two publicly traded stocks in different industries

Assignment Help Financial Management
Reference no: EM131064745

Find two publicly traded stocks in different industries and look up estimates of their β. (a) Using Rf=1%, E(Rm) = 8%, calculate the E(r) for each stock. (b) Explain in words a non-finance student could understand why the one stock has a higher expected return than the other.

Reference no: EM131064745

Questions Cloud

Mean value and total value of the sales vouchers : A company files its sales vouchers according to their value so that they are effectively in four strata. A sample of 200 is selected and the strata means calculated.
What is the firm cost of preferred stock : During the last few years, Agile technologies has been too constrained by the high cost of capital to make many capital investments. Recently, though, money costs have been declining, and the company has decided to look seriously at a major expansion..
Explain whether this economy illustrates a trade surplus : If the Government wanted to stimulate this economy, raising National Income, or GDP by $25 Billion, what would be the amount of change required in Government Autonomous Expenditure AND explain briefly WHY this amount is equal to, greater than, or ..
Large production centres in two towns : A company has large production centres in two towns. The table below represents the distribution of weekly pay of the full-time production staff at these two centres:
Find two publicly traded stocks in different industries : Find two publicly traded stocks in different industries and look up estimates of their β. (a) Using Rf=1%, E(Rm) = 8%, calculate the E(r) for each stock. (b) Explain in words a non-finance student could understand why the one stock has a higher expec..
Assume the interest rate on pounds sterling and euro : Assume the interest rate is 7% on pounds sterling and 16% on Euro. If the Pound is selling at a one-year forward premium of 8% against the Euro, which one of the followings is correct?
The mileages recorded for a sample of company : (Data set CSE8.xlsx can be found on the book's online platform.) Determine the mean, mode and a five figure summary of the data. What do these descriptive statistics tell you about the distribution of the data?
What is your time-compounded annual rate of return : Suppose that 5 years from now you will receive $10,000 at the end of every year for 5 years. What is the present value of this annuity if the opportunity cost rate is 5%? What is the future value of $300 deposited into a mutual fund account at the en..
Explain the role of ethics in the regulatory environment : Discuss the ways that compliance with the regulations is beneficial to the company, industry, and consumers. Examine how the agency you selected and your selected company work together.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the best estimate of the current stock price

The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 11.0%. What is t..

  What is the minimum expected annual return for stock

In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock..

  Sources of cash

Which of the following are sources of cash?

  What is your annual rate of return for the three year period

Three years ago, you bought a 12% bond that had 7 years to maturity and a yield to maturity of 12%. Today (after the sixth interest payment), you sold the bond when it is yielding 15%. What is your annual rate of return for the three year period? All..

  What is the break-even rate in case

Acme has branched out to rentals of office furniture to start-up companies. Consider a $4,600 desk. Desks last for six years and can be depreciated on a five-year MACRS schedule. Assume administrative costs drop to $360 per year. The company has just..

  Call option on the futures contracts with strike price

A futures is currently at $75. The risk free interest rate is 6.5% p.a. compounded monthly. The volatility of the futures price is 30% p.a. continuously compounded. Using binomial option pricing model, what is the value of 6-month American call optio..

  What is the current price of call and stock price sequence

Consider a two-period, two-state world. Let the current stock price be 45 and the risk-free rate be 5 percent. Each period the stock price can go either up by 10 percent or down by 10 percent. A call option expiring at the end of the second period ha..

  The project will require an initial investment

The project will require an initial investment of $20,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $9,000, after taxes, if the project is rejected. What should Garida do ..

  What is the difference between the expected return on equity

Southwest Physicians, a medical group practice in Oklahoma City, is just being formed. It will need $2 million of total assets to generate $3 million in revenues. Furthermore, the group expects to have a total margin of 5 percent. what is the differe..

  What is the monthly mortgage payment

Suppose you are buying your first house for $400,000 with 20% down payment. You have arranged to finance the remaining amount with a 30-year, monthly payment, amortized mortgage at nominal annual rate of 3.6%. What is the monthly mortgage payment?

  T-bills are risk-free

Given the utility function U = E(r) – 0.5Aσ2 and the fact that T-bill offer a risk-free rate of 4%, what is the minimum value for the risk-aversion coefficient A where an investor prefers the T-bills to an investment returning 10% with a standard dev..

  What is taxable equivalent yield on a municipal bond

What's the taxable equivalent yield on a municipal bond with a yield to maturity of 5.1 percent for an investor in the 33 percent marginal tax bracket?

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