User Account

All Pages

What is the estimated beta coefficient of company

Assignment Help Financial Accounting
Reference no: EM131803072

What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?

Given the beta of your company, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium (that is - the difference between the expected rate of return on the 'market portfolio' and the risk-free rate of interest) is 6.5%, use the CAPM equation in order to find out what is the present 'cost of equity' of your company? Explain what is the meaning of the 'cost of equity'.

Choose two other companies, look up their "Beta" and report the names of these companies and their betas. Suppose you invest one third of your money in each of the stocks of these companies. What will the beta of the portfolio be? Given the data in (b), what will the Expected Rate of Return on this portfolio be? Do you feel that the three-stock portfolio is sufficiently diversified or does it still have risk that can be diversified away? Explain.

Reference no: EM131803072

Questions Cloud

Prepare a statement of comprehensive income : Prepare a statement of comprehensive income, using the two-income statement format. Ignore income taxes and earnings per share
Current provision for income tax expense : Total $50,000 Grim's enacted income tax rate is 30%. In its year 1 income statement, what amount should Grim report as current provision for income tax expense?
Financial statement income : Quinn Co. reported a net deferred tax asset of $9,000 in its December 31, year 1 balance sheet. For year 2, Quinn reported pretax financial statement income
How much depreciation expense will be reported in the income : How much depreciation expense will be reported in the income from continuing operations of the company's income statement for 2012
What is the estimated beta coefficient of company : What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?
What is the capacity of the washing stage : What is the capacity of the washing stage? (Round your answer to 2 decimal places.) Capacity of washing stage 21 orders per hour.
What is the per unit inventory cost for a product : A manufacturing company producing medical devices reported $60,000,000 in sales over the last year. Atthe end of the same year, the company had $20,000,000.
What amount of cliff encumbrances : Cliff paid $4,200,000 of the invoices received during the year. What amount of Cliff's encumbrances were outstanding at June 30, 2011?
Compute earnings per share data : Instructions: Compute earnings per share data as it should appear in the 2012 income statement of Shulo Corporation

Reviews

Write a Review

Financial Accounting Questions & Answers

  Explain how does this apply in the audit setting

Game theory "seeks to predict behavior based on an individual's best response given that individual's motivations and the individual's beliefs regarding the likely behavior" of others. A good example is the prisoner's dilemma. Explain how does th..

  For each site compute the net present value

For each site, compute the net present value.-  Use the The sum of the present values of a series of equal cash flows to be received at fixed intervals.

  Company report as office supplies expense for the year

A company had no office supplies available at the beginning of the year. During the year, the company purchased $360 worth of office supplies. On December 31, $120 worth of office supplies remained. How much should the company report as office suppli..

  The annual interest rate paid by the bank

An investment is expected to generate $2,000,000 each year for five years. If the firm's cost of funds is 5%, what is the maximum amount the firm should pay for the investment? You put $200,000 in the bank today; if the annual interest rate paid by t..

  Financial accounting analysis of the public health

Brown Primary Care Dental clinics Oral Health Initiative - In your analysis be sure to incorporate return on investment, time-value of money, and inflation factors.

  What is the total manufacturing cost assigned to job

The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2014. Fortunately, the controller had kept certain statistical data related to the income statement as follows: The beginning merchandise inventory was $93,800 and decreas..

  Determining predicted and actual growth rate

Assume the carrying capacity of Earth is 23 billion. Use the 1960s peak annual growth rate of 2.1% and population of 3 billion to predict the base growth rate and current growth rate with a logistic model.

  Discuss the numbers and balance sheet ratios

Summarize IBM's common size income statement, based on IBMs Income statement data of its 2013 annual report, page 78. discuss the numbers and balance sheet ratios, and specify trends that identify areas of strength, stability and possible concern.

  Mid-market pricing convention appropriate

In what circumstances is application of the mid-market pricing convention appropriate?

  Calculation of break even sales in dollarsselling price per

calculation of break even sales in dollars.selling price per unit-20total fixed expenses-5000variable expenses per

  Determine the present value of the lease payments

Werner Chemical, Inc., leased a protein analyzer on September 30, 2016. The five-year lease agreement calls for Werner to make quarterly lease payments of $407,863, payable each September 30, December 31, March 31, June 30, with the first payment at ..

  Manufacturing has an unfavorable direct labor variance

Tolley manufacturing has an unfavorable direct labor variance. Which of the following would be the most likely reason for this variance. a= company used lower paid workers than they expected B= employees took longer to produce products C= company gav..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd