At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.2 and the risk-free rate was about 5.1%. Apple's pricewas $81.47. Apple's price at the end of 2007 was $190.85. If you estimate the market risk premium to have been 6.1%, did Apple'smanagers exceed their investors' required return as given by the CAPM?The expected return is %. (Round to two decimal places.)

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Description: At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.2 and the risk-free rate was about 5.1%. Apple's pricewas $81.47. Apple's price at the end of 2007 was $190.85. If you estimate the market risk premium to have been 6.

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At the beginning of 2007 (the year the iPhone was introduce was $81.47. Apple's price at the end of 2007 was $190.85. managers exceed their investors' required return as given by The expected return is %. (Round to two decimal places

At the beginning of 2007 (the year the iPhone was introduce was $81.47. Apple's price at the end of 2007 was $190.85. managers exceed their investors' required return as given by The expected return is %. (Round to two decimal places

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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6) Banco Bradesco S.A., announced yesterday that its 1th quarter earnings will be 2.9% higher than last year's 1th quarter. You observe that Banco Bradesco S.A. had an abnormal return of -0.5% yesterday. This suggests that Select one or more: investors expected the earnings increase to be larger than what was actually announced. earnings are expected to decrease next quarter. investors expected the earnings decrease to be smaller than what was actually announced. the market is not efficient. investors expected the earnings decrease to be larger than what was actually announced.
Let’s try using multiples to value eBay. For the year ending December 31, 2015, eBay generated earnings-per-share (EPS) of $1.60. On that same date, Apple’s share price was 12.7 times its EPS. Using Apple’s 12.7x P/E ratio to value eBay would value eBay’s stock at $20.32. eBay finished trading on that day at $27.48. What does that analysis suggest to you?
27) You are pleased to see that you have been given a 4.48% raise this year. However, you read on the Wall Street Journal Web site that inflation over the past year has been 2.38%. How much better off are you in terms of real purchasing power? (Note: Be careful not to round any intermediate steps less than six decimal places.) Your real purchasing power is ____% (Round to two decimal places.)
Using the data in the following table, immediately. 9 calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock The realized return from January 2, 2008, to January 2, 2009 is Data table %. (Round to two decimal places.) (Click on the following icon in order to copy its contents into a spreadsheet.) Dividend Historical Stock and Dividend Data for Boeing Date 1/3/2011 2/9/2011 5/11/2011 8/10/2011 11/8/2011 1/3/2012 Date 1/2/2008 2/6/2008 5/7/2008 8/6/2008 11/5/2008 1/2/2009 Price $87.75 $79.76 $85.01 $66.77 $47.75 $44.02 $0.37 $0.37 $0.37 $0.00 Print Done Price $67.58 $70.28 $80.89 $56.25 $64.88 $74.91 Dividend $0.41 $0.41 $0.41 $0.41 I X
Suppose you recently performed a short sale on IBM stock at $174/share. Initial margin 55 %, maintenance margin 35%. Suppose after the short sale, IBM stock price immediately increasesto $200/share. Will there be a margin call? Show all margin calculations.
(Calculating rates of return) Blaxo Balloons manufactures and distributes birthday balloons. At the beginning of the year Blaxo's common stock was selling for $17.95 but by year end it was only $16.91. If the firm paid a total cash dividend of $1.76 during the year, what rate of return would you have earned if you had purchased the stock exactly one year ago? What would your rate of return have been if the firm had paid no cash dividend? The rate of return you would have earned is %. (Round to two decimal places.)
A firm's earnings and dividends are expected to decline at a constant rate of 3% per year. The most recent dividend (Div0) was $3.8 and the required return on the stock is 14%. The current price of the stock should be $__________. Do not round any intermediate work, but round your final answer to 2 decimal places (ex: 12.34567 should be entered as 12.35).
Find the real rate of return for the Costco stock you purchased for $166.80 five years ago, that has a current price of $382.23, and dividends of $7/per share. The inflation rate is 9.44%. (round to TWO decimal places){WRITE YOUR ANSWER AS A PERCENTAGE…FOR EXAMPLE, WRITE 12.56 FOR 12.56% AND NOT .12563}.
Ee 184.
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company over the past four years: Year 1 Year 2 Year 3 Year 4 High price $ 99.70 $ 123.30 $ 132.70 $ 149.33 Low price 74.53 90.64 71.32 117.85 EPS 8.98 10.73 11.81 13.20 Earnings are projected to grow at 9 percent over the next year. a. What is your high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is your low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
(Calculating rates of return) On December 10, 2007, the common stock of Google Inc. (GOOG) was trading for $ 718.42. One year later the shares sold for only $ 308.82. Google has never paid a common stock dividend. What rate of return would you have earned on your investment had you purchased the shares on December 10, 2007? Question content area bottom Part 1 The rate of return you would have earned is enter your response here %. (Round to two decimal places.)

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