What will be the rate of return

Assignment Help Financial Accounting
Reference no: EM132967265

Question - a) Four years ago, Adibah paid RM14 per share for 200 shares in Takaful Bhd. The current share price has grown by 50% of the purchase price. So far, he has received 10 dividend payments, each amounting to RM0.05 per share. If Adibah decides to sell the shares at present, what will be the rate of return?

b) The CEO of your company, Mdm Maryam is considering investing in a project with beta coefficient of 1.75. What would you recommend her to do if this investment has an 11.5 percent rate of return, the risk-free rate is 5.5 percent, and the rate of return on the market portfolio of assets is 8.5 percent? (Hint: Calculate using CAPM).

As the CFO, advise Mdm Maryam on what does it mean by the answer that you have derived above?

Reference no: EM132967265

Questions Cloud

Recommend whether minks should embark on the expansion : Recommend whether Minks (Ltd) should embark on this expansion project or not. Show all your calculations to justify your recommendation.
What is the theoretical futures prices : What is the theoretical futures prices and What action would you take if the futures price is $83
What cost basis recorded in the buyer accounting records : A 90-day note payable for $52,000, and a mortgage amounting to $81,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is
Discuss the purpose of the discount rate : Discuss the purpose of the discount rate in the valuation process - The specific company risk is a subjective amount applied by the valuation analyst
What will be the rate of return : Four years ago, Adibah paid RM14 per share for 200 shares in Takaful Bhd. If Adibah decides to sell the shares at present, what will be the rate of return
What may reduce managements ability to convey a clear signal : What may reduce managements ability to convey a clear signal to investors? If mamagement forsees higher persistent income in the future
Conversion cycle - is de la salle university-dasmarinas : Identify at least 5 things that De La Salle University-Dasmarinas (DLSUD) currently has that can lead it achieve world class status
Calculate the security equilibrium rate of return : The security's liquidity risk premium is 0.25 percent and maturity risk premium is 0.85 percent. Calculate the security equilibrium rate of return
Create naomi? traditional income statement : Create Naomi?'s traditional income statement and contribution margin income statement for the month. Naomi sold 95 quilts in February.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Under what condition should this activity be recorded

A city constructs curbing in a new neighborhood and finances it as a special assessment. Under what condition should this activity be recorded in the Agency Fund?

  Explain three sources of conflict in dsintok

Determine the type of leadership style practiced by Mr and Mrs Ramli. D'Sintok is a restaurant based in Sintok. It was formed in 1994 by Mr and Mrs Ramli.

  What is the total amount of research and development expense

What is the total amount of research and development expense that should be reported in Polanski's 2014 income statement?

  What could happen to the property

Funds to make several improvements to and buy furnishings for the office space. Due to the above sequence of events, what could happen to the property?

  Why should not write the account number in the post

Why should not write the account number in the Post. Ref. column immediately and instead should enter the account number after he has posted

  Transaction ratio increase decrease none

Sung Corporation, a clothing retailer, engaged in the transactions listed in the first column of the table below. Opposite each transaction is a ratio and space to mark the effect of each transaction on the ratio.

  How much will have to deposit now in an account

You want to have a $ 52,348 college fund in 13 years. How much will you have to deposit now in an account with an APR of 5.8 % and monthly compounding?

  Compute the double declining balance book value

Compute the double declining balance book value at the end of the 3rd year for an asset that originally cost $872 with a depreciable life of 5 years and a salvage value of $70.

  What is the total amount of out-of-pocket expense fred

Fred and Daphne have one child, Velma. What is the total amount of out-of-pocket expense Fred and Daphne will have to pay for all family members?

  Compute the amount reported as cost of goods sold

Holiday Bakery owns 60 percent of Farmco Products Company’s stock. On January 1, 20X9, inventory reported by Holiday included 21,000 bags of flour purchased from Farmco at $18 per bag. Compute the amount reported as cost of goods sold in the 20X9 con..

  How to process accounts for moulding and finishing showing

Plastico Limited makes plastic bottles through two processes, How to Process accounts for moulding and finishing showing clearly the normal and abnormal losse

  Find what rate of return must uncle fred earn on investment

What rate of return must she earn on her investment over the next 20 years to permit her to withdraw $75,000 at the end of each year through age 80

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