Firm expected rate of return and standard deviation

Assignment Help Financial Management
Reference no: EM131594613

The stock of a given corporation has a 25% chance of producing a 16% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return and standard deviation?

Reference no: EM131594613

Questions Cloud

The firm uses the capm to estimate the cost of equity : The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. What is its WACC?
Return annual benefit for six years with salvage value : A $10,000 investment will return annual benefit for six years with a salvage value of $3,000 at the end of six years in todays dollars.
Financial executives place the greatest importance : Financial executives place the greatest importance on which one of these factors when setting dividend policy?
Contrast yale endowment with bus endowment : Briefly compare and contrast Yale’s endowment with BU’s endowment., particularly with regard to their respective purposes,
Firm expected rate of return and standard deviation : What is the firm's expected rate of return and standard deviation?
What is the net present value of the project : What is the net present value (NPV) of the project if the company’s cost of capital is 10.78 percent?
Would you accept or reject this investment project : You wish to build a bakery. The initial cost of the bakery is $36,000,000. would you accept or reject this investment project?
Should the firm undertake investment : We have a project which gives us $1 million net cash flow, which will continue for 5 years. Should the firm undertake the investment?
Find the APY for each credit card : Consider the following three credit card offers. Find the APY for each credit card, and decide which card offers the best deal for the customer.

Reviews

Write a Review

Financial Management Questions & Answers

  About the forward rate as forecast of the future spot rate

Mexican interest rates are normally substantially higher than U.S. interest rates. What does this imply about the forward rate as a forecast of the future spot rate? Does the forward rate reflect a forecast of appreciation or depreciation of the Mexi..

  What is the intrinsic value of common equity per share

A firm has free cash flow of $500,000 on their most recent financial statements. The firm expects the FCF’s to grow at about 2.5% per year. The cost of capital for the firm is 10.50%. what is the intrinsic value of common equity per share?

  What is the effective after-tax lease borrowing rate

What is the effective after-tax lease borrowing rate? How does this compare to Riverton's actual after-tax borrowing rate?

  How much will the firm collections exceed its payments

Assume there are 30 days in each month. By how much will the firm’s collections exceed its payments for Quarter 3?

  Find the WACC for Cream and Crimson Foods

Cream and Crimson Foods has a target capital structure of calling for 40.00 percent debt, 5.00 percent preferred stock, and 55.00 percent common equity (retained earnings plus common stock). Its before-tax cost of debt is 10.00 percent. The tax rate ..

  What is apples beta coefficient

Apple Inc.’s annual stock returns for the last five years are: 146.81%, 53.09%, 25.55%, 32.56%, and 8.06%. The S&P 500 Index’s annual returns for the last five years are: 23.45%, 12.78%, 0.00%, 13.41%, and 29.60%. What is Apple’s beta coefficient?

  Describe the relation between the payoff and stock price

Describe the relation between the payoff and st.ock price.- Describe why the strategy would be undertaken.- Under what circumstances will the strategy have a beneficial payoff.

  Given two choices for your prize money

You just won the lottery and you are given two choices for your prize money: (1) A present lump sum of $20 million or (2) $1 million per year that you and your heirs will receive forever, beginning one year from now. If the appropriate interest rate ..

  The concept of homemade leverage is most associated with

The concept of homemade leverage is most associated with:

  What is the equivalent annual savings

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $220,000 and sell its old low-pressure glueball, which is fully depreciated, for $40,000. The new equipment has a 10-year useful life and will sa..

  Exchanges the building for investment land worth

Glen owns a building that is used in business. The building is worth $200,000, but is subject to a mortgage of $40,000. Glen's basis in the building is $120,000. Glen exchanges the building for investment land worth $150,000 plus $10,000 cash. In add..

  What is the equivalent monthly interest rate

A couple purchases a home and signed a mortgage for $240000 to be paid in equal monthly installments over 25 years, with interest i^(2) = 0.18. What is the equivalent monthly interest rate i? What are the monthly payments? How much principal is repai..

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