Fluctuations in the value of their investments

Assignment Help Financial Management
Reference no: EM13885073

Rational investors ________ fluctuations in the value of their investments.

A) are averse to

B) prefer

C) are indifferent to

D) none of the above

Reference no: EM13885073

Questions Cloud

What is the estimated floor price of the convertible : ABC Incorporated’s stock is selling for $40 per share and has an expected dividend in the coming year of $2.00, and has an expected constant growth rate of 5.00%. The company is considering issuing a 10-year convertible bond that would be priced at i..
Capital structure consisting : Lincoln Funeral Home has a capital structure consisting of 20% debt and 80% equity. Lincoln’s debt currently has an 8% yield to maturity. The risk free rate is 5% and the market risk premium is 7%. Using CAPM, Lincoln estimates that the cost of equit..
Debt ratio-payout were both changed by indicated amounts : Quinlan Electrical has quite a few positive NPV projects from which to choose. The problem is that it has more of these projects than it can finance without issuing new stock and the board of directors refuses to issue any new shares in the foreseeab..
Fluctuations in the value of their investments : Rational investors ________ fluctuations in the value of their investments.
Return on average compared to treasury bills : Historically, stocks have delivered a ________ return on average compared to Treasury bills but have experienced ________ fluctuations in values.
Dividends-what is the current share price : Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 11 percent, and the company just paid a di..
What is the present value of an investment : What is the present value (PV) of an investment?
What is the value of a stock with an expected dividend : If expected dividends grow at 6% and the appropriate discount rate is 10%, what is the value of a stock with an expected dividend of $2.75?

Reviews

Write a Review

Financial Management Questions & Answers

  Amount the should be invested in treasury bonds

A pension fund manager decides to invest a total of at most $45 million in U.S. Treasury bonds paying 5% annual interest and in mutual funds paying 9% annual interest. He plans to invest at least $5 million in bonds and at least $ 10 million in mutua..

  Roughly evenly split between credit and cash sales

On March 31, 2013, Mike's Bike Shop had an outstanding accounts receivable of $19,000. Mike's sales are roughly evenly split between credit and cash sales, with the credit sales collected half in the month after the sale and the remainder 2 months af..

  What is each alternatives irr

What is each alternative's IRR and If the cost of capital for both methods is 9 percent, which method should be chosen? Why?

  Present value of perpetuity-when dealing with estate taxes

Stock A has a current price of $40.00, a beta of 2.5, and a dividend yield of8%. If the Treasury bill yield is 5% and the market portfolio is expected to return15%, what should stock A sell for at the end of an investor’s three year horizon? What is ..

  It is important for society as whole to solve agency problem

It is important for society as a whole to solve the agency problem,

  Explain why the reward-to-risk ratio

Given that higher risk investments, such as small-company stocks, have outperformed other investments over time, why don't all investors choose to invest only in these high risk securities? Explain why the reward-to-risk ratio must be equal for all s..

  Risk-cost-politics and public relations

Every company has capital projects. The company you have selected must need something! Be it a new wing to the building, a new product line to be funded, a new piece of equipment, find one new acquisition your company needs. •Risk •Cost •Politics (ge..

  What was the dividend yield for the year

The common stock of Acadia, Inc., sold for $32.90 at the beginning of the year and $33.12 at the end of the year. During the year, the stock paid $1.10 in dividends. What was the dividend yield for the year?

  Effective annual rate on loan

You want to buy a new sports coupe for $75,600, and the finance office at the dealership has quoted you a loan with an APR of 8 percent for 48 months to buy the car. Monthly payments. Effective annual rate on this loan.

  Explain how capital reduces banking risks

Explain how capital reduces banking risks. Discuss the importance of cash flows and economic (market) value rather than accounting value.

  What was the price of stock at the end of the day

At the beginning of the day, you purchased 300 shares of stock for $75 a share with an initial cash investment of $12,000. Your broker requires a 30 percent maintenance margin. At the end of the day, you took care of the margin call by depositing add..

  What is the current restocking cost

The Trektronics store begins each week with 200 phasers in stock. The stock is depleted each week and reordered. The carrying cost per phaser is $37 per year and the fixed order cost is $45. What is the current total carrying cost? What is the curren..

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