Particular stock sells

Assignment Help Financial Management
Reference no: EM131495356

A particular stock sells for $30. The stock's beta is 1.25, the risk-free rate is 4%, and the expected return on the market portfolio is 10%. If you forecast that the stock will be worth $33 next year (assume no dividends), should you buy the stock or not?

Reference no: EM131495356

Questions Cloud

The highest equivalent uniform annual owrth : they must choose the cutter that gives them the highest equivalent uniform annual owrth. (EUAW).
Disadvantages of raising monies via bond issue versus loan : In addition to describing the impact, they would also like a comparison of the advantages and disadvantages of raising the monies via a bond issue versus a loan
Maximize the value of the company for shareholders : How aggressively should TJX expand globally, and where, and when, to maximize the value of the company for shareholders?
Provide information on the implicaitons the bond issuance : Please provide information on the implicaitons the bond issuance could have on the financial statements and the possibility of the interest rates incresing
Particular stock sells : A particular stock sells for $30. The stock's beta is 1.25, the risk-free rate is 4% and the expected return on the market portfolio is 10%.
Mature manufacturing firm : Antiques ‘R’ Us is a mature manufacturing firm.
Considering adding robotic paint sprayer to production line : New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line.
What is the projects operating cash flow for the first year : What is the project's operating cash flow for the first year (t = 1)?
Active return-true active return and misfit active return : Active Return ? True Active Return ? Misfit Active Return ? True Active Risk?

Reviews

Write a Review

Financial Management Questions & Answers

  Explain the dupont analysis method of performance analysis

Briefly explain the "DuPont Analysis" method of performance analysis. What specific strengths or features of this methodology would motivate you to use it in developing a recommendation for a firm’s return on equity (ROE)? If you do not use this meth..

  When assigning value to firms stock or bond

Valuation of a firm’s financial assets is said to be based on what is expected in the future, in terms of the future performance of the firm, the industry, and the economy. What types of value would you consider when assigning “value” to a firm’s sto..

  What is the terminal cash flow for this project

You are analyzing the purchase of new equipment. Since you are not an expert on this type of equipment, you hire a consulting firm to make recommendations.  What is the incremental fee cash flow for the first year of the project? What is the terminal..

  Calculate the effective financing rate

Marcus, Inc., a U.S. company takes out a 1-year loan in Germany. The U.S. 1-year interest rate is 5%, and the German 1-year interest rate is 6%. The spot rate of the euro is $1.33 and the 1-year forward rate is $1.29. Calculate the effective financin..

  Paid for newly-issued two-year risk-free bond to sell at par

What is the coupon rate which must be paid for a newly-issued (on 1/1/10) two-year risk-free bond to sell at par?

  What does it mean if a company has a price to sales

What does it mean if a company has a Price to Sales (TTM) ratio of 3.83 while the industry and sector ratios are 2.27 and 4,190.74? How are they performing against the industry and sector ratios? Why are they performing as such?

  Weighted average of that implied by outstanding debt issues

Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $77, and the book value per share is $8. Filer Manufacturing also has two bond issues outstanding. The most recent dividend was $4.9 and the dividend gro..

  How much value does dollar billion investment create-destroy

Alcoa's weighted average cost of capital was around 12%, but its investments were earning returns closer to 5%. From 2010 to 2012, Alcoa invested roughly $1 billion in capital expenditures. Calculate the NPV of that investment using a 12% discount ra..

  Measure of the debt ratio upward or downward

Capital Structure. Here is a simplified balance sheet for Epicure Pizza (figures in $MM) Current assets 80 Fixed assets 125 Total 205 Current Liabilities 60 Long term debt 65 Equity 80 Total 205 Note: There are 16 million shares outstanding. Do you n..

  What will the price be in three years and in fifteen years

Patience, Inc., just paid a dividend of $2.95 per share on its stock. The dividends are expected to grow at a constant rate of 5.00 percent per year, indefinitely. Assume investors require an 11 percent return on this stock.

  What are break-even levels of ebit for each plan as compared

Haskell Corp. is comparing two different capital structures. Plan I would result in 12,000 shares of stock and $100,000 in debt. Plan II would result in 8,700 shares of stock and $155,000 in debt. Compare both of these plans to an all-equity plan ass..

  What is the exact cost of trade credit as an annual rate

If Jolly Joe’s buys $100 worth of supplies on credit with terms 3/10 n30 and pays the bill on the 28th day after the purchase: What is the approximate, or “nominal,” cost of trade credit as an annual rate? What is the exact cost of trade credit as an..

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