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1. According to the CAPM, what is the market risk premium given an expected return on a security of 20.0%, a stock beta of 1.8, and a risk-free interest rate of 11%?
a. 5.00% b. 19.80% c. 11.00% d. 9.90%
2. A common stock pays an annual dividend per share of $2.20. The risk-free rate is 7% and the risk premium for this stock is 3%. If the annual dividend is expected to remain at $2.20, what is the value of the stock?
Stock value $
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Elements of the Statement of Cash Flows
What is the payback period of a project with average cash outflows of $8,000, average annual cash inflows of $10,000, and an initial investment of $13,000? The payback period is how many years?
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Assume a firm has warrants outstanding that permit the holder to buy one new share of stock at $25 per share. The market price of the stock is now $34. What is the intrinsic value of the warrant?
Draw a time line to show the cash flows of the project and compute the project's payback period, net present value, profitability index, and internal rate of return.
Among the assets in a decedent’s gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses. What amount of closely held corporate ..
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