What is percentage rate of return

Assignment Help Financial Management
Reference no: EM131952854

1. Suppose that all goods and services are tradeable. A basket of goods and services in the United States costs $110 and the same base in England costs £100. The current spot rate is E$/£=1.2. Is the British pound over or undervalued relative to the US dollar?

2. You have $30,000 in a margin account, 60% initial margin required. Suppose you buy 1,000 shares of IBM, for $50/share. Assume no dividends, and that your borrowing rate is 6.2%. What is your percentage rate of return if, in one year, IBM stock is selling for $39 per share?

Reference no: EM131952854

Questions Cloud

What is effective percentage annual rate of return : The company paid a dividend of $0.25 per share the day before you sold your stock. What is your effective percentage annual rate of return?
Basket of goods and services : Suppose that a basket of goods and services in the United States costs $110 and in China the same basket costs ¥700.
What is the expected rate of nominal appreciation : What is the expected rate of nominal appreciation or depreciation of the peso relative to the dollar?
What is the exchange rate in euros : What is the exchange rate in euros? What effect does this have on Europe's price level?
What is percentage rate of return : What is your percentage rate of return if, in one year, IBM stock is selling for $39 per share?
Constant growth model estimate the implied cost of equity : Using the constant growth model estimate the implied cost of equity AND the implied equity risk premium.
Firm finance with only the lowest-cost type of capital : Why can’t a firm finance with only the lowest-cost type of capital?
Discuss the role of finance in the health services industry : Briefly discuss the role of finance in the health services industry.
Investor-owned and not- for-profit corporations : What are the primary differences between investor-owned and not- for-profit corporations?

Reviews

Write a Review

Financial Management Questions & Answers

  Credit card issuers must by law print annual percentage rate

Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 19.83%, with interest paid monthly, what is the card's EFF%? State your answer as a percentage to 2 d..

  Pure play approach to determine required return

When calculating WACC using the pure play approach to determine required return, what company's data should i use e.g tax rate, debt? should i use the data for the company that I am computing the required return for or using data for the pure play co..

  Can produce unexpected losses for investors

Many companies issued preferred stock with a provision that allows the company to buy back the proffered stock at it original price after five years. The article notes that his provision " can produce unexpected losses for investors". Why might these..

  Did your actual return equal your expected return

The yield to maturity on your new bond is 5.5% with a 10-year remaining life. Did your actual return equal your expected return? Explain.

  Straight-line depreciated to zero over five years

A project has an initial investment of $3.5 million, which will be straight-line depreciated to zero over five years

  What is the corporation marginal tax rate

What is the corporation’s average tax rate? What is the corporation’s marginal tax rate?

  Indirect effects on project cash flow1 nbspprovide an

indirect effects on project cash flow1. nbspprovide an example of a sunk cost from your firm.2. nbspprovide an example

  Find the value of the perpetuity

Amy inherited a perpetuity with annual payments starting in six months. Find the value of the perpetuity on December 1st 2009,

  Investors expect corp to begin paying dividends

Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Corp to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from today. If the requi..

  Maximization different from stock price maximization

How is profit maximization different from stock price maximization? Under what conditions might profit maximization not lead to stock price maximization?

  Find the break-even quantity

If the requirement is 150,000 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper ?

  New investment if the firm required rate of return

What is the NPV of this new investment if the firm's required rate of return is 12%? What is the IRR? Should the project be accepted?

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