Historical market risk premium on small firm common stocks

Assignment Help Financial Management
Reference no: EM131881909

1. The historical market risk premium on small firm common stocks has been about 13.6%. Assume the risk-free rate is 0.13%. BroadVision Inc. has a beta of 0.98. What return should you expect from an investment in BroadVision Inc.?

2. You buy a stock for $15 per share and sell it for $20 after holding it for slightly over a year and collecting a $1.50 per share dividend. Your ordinary income tax rate is 28% and your capital gains tax rate is 20%. Your after-tax rate of return is _______.

Reference no: EM131881909

Questions Cloud

What is the current value of the stock : Investors require a 16% return from investments such as this. If the dividend is expected to grow at steady 8% per year, what is the current value of the stock?
New capital structure have on the firm net income : What impact would the new capital structure have on the firm's net income, total dollar return on investors, and ROE?
What is the straight-bond value : What is the straight-bond value, assuming that straight debt of equivalent risk and maturity is yielding 8%
What is the value for the investment : An investment offers $5,650 per year for 15 years, If the required return is 8 percent, what is the value for the investment
Historical market risk premium on small firm common stocks : The historical market risk premium on small firm common stocks has been about 13.6%.
Exchange rate to make the interest rate parity work : what must be the forward exchange rate to make the interest rate parity work?
What is paul gain and loss reported on his tax return : Paul bought stock for $2,000 and sold the same stock for $2,300. What is Paul’s gain/loss reported on his tax return?
Interpret the performance and provide necessary numbers : The stock beta is 1.3, return on the market is 10%, treasury rate is 4.%. The actual return is 1 1V%. Interpret the performance and provide necessary numbers..
Find the operating cash flow for year : Find the operating cash flow for the year for Harper? Brothers, Inc. if it had sales revenue of $313,500,000?,

Reviews

Write a Review

Financial Management Questions & Answers

  Anyone with pencil can calculate financial ratios

It is often stated that anyone with a pencil can calculate financial ratios, but it takes a brain to interpret them. What kinds of things should the analyst keep in mind when evaluating the financial statements of a given firm?

  Draw the payoff graphs for long call with strike price

Draw the payoff graphs for a long XYZ call with strike price $98 and a long XYZ put with strike price S104 respectively.

  Specializes in analyses of firms capital structures

Assume that you have just been hired by Adams, Garitty, and Evans (AGE), a consulting firm that specializes in analyses of firms’ capital structures. Your boss has asked you to examine the capital structure of Campus Deli and Sub Shop (CDSS), which i..

  Calculate the time required to repay the loan

Calculate the time required to repay the loan, in years and months (at the new interest rate) if the loan instalment remains unaltered ($4,510.11). (g) In part (f), what will be the amount of the final monthly repayment?

  It does not pay dividends

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings, hence it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.00 coming 3 years from today..

  Result is more consistent with the irrational expectations

LaPorta, Lakonishok, Shleifer, and Vishny (“Good News for Value Stocks,” Journal of Finance, June 1997) study the returns on stocks on the few days surrounding their quarterly earnings announcements (relative to various expected return benchmarks). D..

  Compute the price of an american call

Compute the price of an American call option with strike K = 110 and maturity T = :25 years. - Compute the price of an American put option with strike K = 110 and maturity T = :25 years.

  Cost of goods sold-cost of ending merchandise inventory

Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.

  What is the aftertax cost of debt-pretax cost of debt

Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 35 percent. What is the pretax cost of debt? Wha..

  What is the currency loss

Mr. M. Balotelli, the owner of Balotelli Company, imports German cheeses from Klopp Company, What is the currency loss?

  Determine price of put option with same exercise price

Given the following parameters use put-call parity to determine the price of a put option with the same exercise price.

  After accounting for the premium paid

The exercise price is $.45. If the option is exercised, what is the total amount of dollars paid (after accounting for the premium paid)?

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