Long run average stock return-current t-bill return

Assignment Help Financial Management
Reference no: EM13846299

Use the information below to estimate the expected retur on the stock of Bieber Corporation.

Long run average stock return = 10%

Long run average T-bill return = 4%

Current T-bill return = 2%

Reference no: EM13846299

Questions Cloud

Probability distribution of returns : You invest in a stock with the following probability distribution of returns: A probability of .15 that the return will be 16%; a probability of .35 that the return will be 24%; a probability of .3 that the return will be -40%; and a probability of ...
Investing public is an example : XYZ corporation is authorized for 1,000,000 shares and currently has 800,000 shares outstanding. In an attempt to raise additional capital, XYZ decides to issue the remaining 200,000 shares for which it is authorized to do so. The issuance of an addi..
Our normal actuarial notation : To accumulate $18,000 at the end of 7n years, a deposit of $5,000 is made at the end of the first 3n years and another deposit of %7,200 is made at the end of 5n years. Find where v is taken from our normal actuarial notation and v > 0.
Why do business organizations conduct swot analysis : Why do business organizations conduct SWOT Analysis? In what way and how is the SWOT Analysis of importance in the formulation of a business plan and/or marketing plan?
Long run average stock return-current t-bill return : Use the information below to estimate the expected retur on the stock of Bieber Corporation. Long run average stock return-Current T-bill return
What would his monthly payments be at this rate : David would like to buy a new boat. The boat costs $75,000. David can put 20% down and would like to finance the rest with a 10 year loan. The bank is offering a rate of 3.99% APR on that term. What would his monthly payments be at this rate?
Comprehensive problems-compute incremental return on sales : Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks. Compute the incremental Return on Sales if these new credit customers are accepted: Would establish local collect..
What determines the price of financial instruments : What determines the price of financial instruments? Which are riskier, capital market instruments or money market instruments? Why? What are the four major functions of the Federal Reserve System? What are the main responsibilities of the FOMC?
Perpetuity is constant stream of cash flows : Perpetuity is a constant stream of cash flows without end. Why doesn’t it have an infinite value? Under what cases can we easily calculate its value?

Reviews

Write a Review

Financial Management Questions & Answers

  Describe how the internal rate of return

Describe how the Internal Rate of Return is calculated and describe the information this measure provides about a sequence of cash flows. What is the IRR criterion decision rule? What is the relationship between IRR and NPV and are there any situatio..

  What is current value of call on stock with exercise price

The risk-free rate is currently 2.8%. In one year the price of a given share of stock that currently trades at $40 per share is expected to either increase by 8% or decrease by 2%. What is the current value of a call on this stock with exercise price..

  What is the required rate of return on a stock with a beta

Assume that the risk-free rate is 7% and the expected return on the market is 12%. What is the required rate of return on a stock with a beta of 2.4?

  What is the cost of equity if the debt-equity ratio

Sun Sports has a unlevered cost of capital of 11%, a cost of debt of 7%, and a tax rate of 40%. What is the cost of equity if the debt-equity ratio is 0.50?

  Different forms of the efficient markets hypothesis

An investment of £100,000 is expected to produce an annual net cash flow of £20,130 for each of the next ten years. Calculate the NPV of the investment if the required rate of return is 9 percent and Draw a diagram illustrating a straddle, using c..

  Paid prior to paying dividends to common stockholders

A firm has an outstanding issue of 1,000 shares of preferred stock with a $100 par value and an 7 percent annual dividend. The firm also has 15,000 shares of common stock outstanding. If the stock is cumulative and the board of directors has passed t..

  About the sales increase

Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $2,600,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  Explain what kinds of real estate investment vehicles exist

Despite the crash of 2008 and 2009, real estate remains a solid investment over time. Why might this be the case? What is it about real estate that makes it a good investment? What kinds of real estate investment vehicles exist

  Calculate the sales volume in dollars

Big Chill, Inc. sells portable dehumidifier units at $187. Unit variable costs are $111. Fixed costs are $4,175,000. Management has set a profit objective of 15.2% return on sales. Calculate the sales volume in dollars that will provide a 15.2% retur..

  Responsibility to forecast the sales

Fiat has introduced a new car in the United States called the 500. Assume that your boss has the responsibility to forecast the sales of the 500 in the United States for the year 2012. He believes that Fiat will sell 85,000 of the 500s for 2012. Supp..

  What was the delta ray brands net income after-tax

Delta Ray Brands Corp. just completed their latest fiscal year. The firm had sales of $17,439,100. Depreciation and amortization was $891,100, interest expense for the year was $827,900, and selling general and administrative expenses totaled $1,477,..

  Explain what is the financial break-even point

The machine costs $575,000. The sales price per pair of shoes is $60, while the variable cost is $14. $165,000 of fixed costs per year are attributed to the machine. Assume that the corporate tax rate is 34 percent and the appropriate discount rat..

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