Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time Brangus cattle Comapny 1 $15 2 12 3 14 4 24 5 25 (Click on the icon
Q: Loan payments of $2,750 due 96 days ago and $3,100 due today are scheduled to be repaid with a…
A: Formula: Interest on simple interest method =Present value * rate of interest per annum * (No of…
Q: Laurel, Inc., has debt outstanding with a coupon rate of 5.8%and a yield to maturity of 7.1%.Its…
A: For the calculation of effective after tax cost of debt we will use the below formula After tax…
Q: 13 Bond Z is a 2% annual coupon bond maturing in 5 years with a face value of $1,000. The interest…
A: The Macaulay duration is the weighted average term to maturity of the cash flows from a bond. The…
Q: We have the following information about a bank's balance sheet. Rate sensitive assets = $10,000,000…
A: Rate sensitive assets = $10,000,000 Fixed-rate assets = $20,000,000 Rate sensitive liabilities =…
Q: pay-off of 2100 in three years. Now, which project should you choose when discount rates is zero, 5%…
A: Net Present Value: It represents the present worth in absolute terms for a project. It is computed…
Q: 1. Which of the following investment has the highest effective annual rate ( EAR)? a. An investment…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 14. AT Steel currently has no debt and an equity cost of capital of 14%. Suppose that the company…
A: Given Equity cost of capital = 14% Debt cost of capital = 8% tax rate = 21% debt to value ratio =…
Q: d 10,000 units of chairs from YS furnishing for $300,000. The listed price for 10,000 units was…
A: Trade discount is a percentage reduction in a manufacturer's list price offered to wholesalers or…
Q: Using your iphone, you noticed that IBM was trading at a bargain price, so you decided to purchase…
A: A person who is buying or selling the shares of a company that is already listed will have to do the…
Q: Bongani deposited R100 000 in the bank which offers 5,5% per annum simple interest.His intention is…
A: Deposit = 100,000 Interest rate = 5.5% Simple interest N = 4 years
Q: how much does he need to pay quarterly?
A: A stream of equal cash flows (CF) paid or received periodically is termed as annuity. Annuity due…
Q: Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon…
A: Maximum Price of Bond = Present Value of future cash flows of bond (discounted at required yield)…
Q: Sean expects to receive $300,000 in 5 years from a trust fund. If a bank loans money at an interest…
A: In the given case, Seam is expected to receive $300,000 in 5 years from a trust fund. He can borrow…
Q: What is the Present Worth Value for the second alternative if you are going to alternatives on a…
A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…
Q: Q1: Define and differentiate between: a) Organized exchanges and Over the counter markets b) Open…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Bigbie Corp issued a five-year bond a year ago with a coupon of 8 percent. The bond pays interest…
A: Bond price is basically the net discounted value of the bond's future cash flow. It denotes the…
Q: The common shares of Twitter, Inc. (TWTR) recently traded on the NYSE for $21.10 per share. You have…
A: First, we will check the conditions provided in the question to decide whether it is a call or a put…
Q: Finance 1.In the US Balance of Payments accounts, a sale of euros by the US treasury should be…
A: Balance of payment is the record of all international transactions i..e., payments and receipts,…
Q: Carter Corporate has current assets of $120 million and inventory equal to $30 million. If Carter’s…
A: To calculate the current ratio we will use the below formula Current ratio = Current…
Q: ity (1000 kg product per year) has an d variable costs are 61 per cent of ne it (ie, profit per kg…
A: Break even point = Fixed cost / Contribution margin
Q: What is the future value of a regular $500 60-month annuity (first cash flow starting 1 period from…
A: Future value Money's value can be described in terms of its future value (compounded) or present…
Q: The Southern Guru Copper Company operates a large mine in a South American country. A legislator in…
A: Rate of return: It is the amount of money earned or lost during a period with respect to…
Q: You are evaluating a project that will cost $502,000, but is expected to produce cash flows of…
A: 1. Pay back period is the length of time required to recover the cost of Investment. It is…
Q: Consider the following price and dividend data for GS Company: Date Price (S)Dividend (S) December…
A: Solution:- Realised annual return means the annual percentage rate of return earned by holding a…
Q: The expected return on Mike's Seafood shares is 15.8 per cent. If the expected return on the market…
A: Expected return of a stock can be calculated using Capital Asset Pricing Model (CAPM) as: = Risk…
Q: Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred…
A: The Weighted Average Cost of Capital WACC is calculated with the help of following formula WACC =…
Q: An amortized loan means that the principal is gradually paid off during the life of the loan. True…
A: The question is related true or false.
Q: 3- Which of the following is not an activity reported in the cash flow statement? Select one: a.…
A: A cash flow statement summarizes all cash inflows received by a firm from continuing activities as…
Q: Ford Motor Company has issued bonds with a maturity date of November 1, 2046 that have a coupon rate…
A: While determining the amount of coupon to be paid or the price of bond at the time of issue, it is…
Q: What is the cash flow of a 6% coupon bond that pays interest annually, matures in 9 years, and was…
A: Given, The coupon rate is 6% term of bond is 9 years Par value of bond is $1000
Q: Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence,…
A: The price of share today will be calculated by using dividend discount model. The perpetuity Value…
Q: According to the Capital Asset Pricing Model (CAPM), an asset with negative beta: a. Cannot…
A: Capital Asset Pricing Model (CAPM): CAPM is the method of calculating the expected return on…
Q: Relion Insurance Solutions (RIS) borrowed from Farm Credit Services of America (FCSA) for their…
A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a…
Q: ocusing solely on profits can be dangerous. Explain why shareholder wealth maximization, rather than…
A: Profit maximization is not the same as wealth maximization. A company can pursue both profit…
Q: Summerdahl Resort's common stock is currently trading at $26 a share. The stock is expected to pay a…
A: To calculate the cost of common equity we will use the below formula Cost of common equity =…
Q: what is the present value of the perpetuity?
A: Present Value: It represents the present worth of the perpetual/constants cash flows. It is…
Q: If i=29, the value of X in the following balanced CFD is neare 500 300 100 200 600 X
A: To calculate the value of X, future value of all the cash flows shall be calculated. Future value of…
Q: ntion that in the absence of the tax advantages of debt the use of gearing can increase the expected…
A: The use of debt is very common in organization because the debt had the tax advantages due to which…
Q: Lomack Company's bonds have a 8-year maturity, a 9% coupon, paid semiannually, and a par value of…
A: Given, Par value of bond is $1000 Market rate is 4% Coupon rate is 9%
Q: D4) Finance Spillcore pipeline has an after tax cost of debt of 4% and a cost of preferred equity of…
A: The capital structure of the company consists of debt, preferred stock and common shares. The…
Q: A company's current ratio is 2.0. Which of the following actions would lower the current ratio,…
A: Current ratio is one of the liquidity ratio of the business, which shows ratio between current…
Q: Explain the goal of yield management
A: Yield management is a kind of pricing strategy.It is based on the understanding of the behavior of…
Q: The Campbell Company is considering adding a robotic paint sprayer to its production line. The…
A: Net present value is difference between the present value of cash flow and initial investment of…
Q: Our clients saved $2,500,000 for retirement. They wish to withdraw $20,000 from the fund each month…
A: An annuity is a contract where periodic payments are made in the future in return for a lump-sum…
Q: Holt Enterprises recently paid a dividend, D0, of $3.50. It expects to have nonconstant growth of…
A: Horizon date is the date when the Growth rate becomes Constant. Horizon or Continuing Value is…
Q: 9. Which of the following statements is FALSE? A) A conclusion of the CAPM is that investors should…
A: CAPM assumes that all investors can buy and sell all securities at competitive market prices where…
Q: 6. Which of the following is NOT an assumption used in deriving the Capital Asset Pricing Model…
A: Capital Asset Pricing Model :- This model was developed by Sharpe Mossin and Lintner in 1960 . In…
Q: If $13,376.39 was the interest earned on lending $101,000.00 for 9 years, what was the quarterly…
A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…
Q: A private individual buys shares in a Norwegian limited liability company on 1 January this year for…
A: Present value refers to the current valuation for a future sum. Investors determine the present…
Q: Roadside Markets has a 6.75 percent coupon bond outstanding that matures in 10.5 years. The bond…
A: Bonds are debt instruments issued by companies. Bond pays periodic fixed coupon payments.
Time
|
Brangus cattle Comapny
|
|
---|---|---|
1
|
$15
|
|
2
|
12
|
|
3
|
14
|
|
4
|
24
|
|
5
|
25
|
|
Question content area bottom
Part 1
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 1 images
- (Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time 1 23WN Brangus cattle Comapny $16 8 11 21 5 29 (Click on the icon in order to copy its contents into a spreadsheet.) 4 a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Brangus Cattle Company's stock over this period? c. What is the geometric average rate of return earned by investing in Brangus Cattle Company's stock over this period? d. Which type of average rate of return best describes the average annual rate of return earned over the period (the arithmetic or geometric)? Why?(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time 1 2 9 3 14 4 22 5 28 (Click on the icon in order to copy its contents into a spreadsheet) Brangus cattle Comapny $17 a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Brangus Cattle Company's stock over this period? a. The annual rate of return at the end of year 2 is% (Round to two decimal places.)(Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock prices over the last five years and paid no cash dividends Time 2 Marsh $10 10 20 4 5 10 (Click on the icon in order to copy its contents into a spreadsheet) 7 a Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of retum earned by investing in Marsh's stock over this period? C. What is the geometric average rate of return earned by investing in Marsh's stock over this period? d. Considering the beginning and ending stock prices for the five-year period are the same, which type of average rate of return (the arithmetic or geometric) better describes the average annual rate of return earned over the period? a. The annual rate of return at the end of year 2 is%. (Round to two decimal places.) GILE
- Question content area top Part 1 (Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time Brangus cattle Comapny 1 $ 16 2 8 3 14 4 21 5 25 (Click on the icon in order to copy its contents into a spreadsheet.) a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Brangus Cattle Company's stock over this period? c. What is the geometric average rate of return earned by investing in Brangus Cattle Company's stock over this period? d. Which type of average rate of return best describes the average annual rate of return earned over the period (the arithmetic or geometric)? Why? Question content area bottom Part 1 a. The annual rate of…(Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock prices over the last five years and paid no cash dividends: Time 1 Marsh $12 2 3 10 20 4 5 12 (Click on the icon in order to copy its contents into a spreadsheet.) a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Marsh's stock over this period? c. What is the geometric average rate of return earned by investing in Marsh's stock over this period? d. Considering the beginning and ending stock prices for the five-year period are the same, which type of average rate of return (the arithmetic or geometric) better describes the average annual rate of return earned over the period? 4 a. The annual rate of return at the end of year 2 is %. (Round to two decimal places.)(Computing rates of return) From the following price data, compute the annual rates of return for Asman and Salinas. Time 1 2 3 12 4 14 (Click on the icon in order to copy its contents into a spreadsheet.) How would you interpret the meaning of the annual rates of return? Asman $9 11 Salinas $30 27 32 36 The rate of return you would have earned on Asman stock from time 1 to time 2 is %. (Round to two decimal places.)
- Note: Please answer this question only by typing your answers in the typing space available for this question Assume that the annual rates of return for two stocks (Reliance and Wipro) for the past 5 years are as given below: Year 2 3 4 5 Reliance 35% 11% -7% -12% 24% Wipro 28% 7% -11% 15% -5% Based on the above information answer the following questions: (a) Compute the arithmetic mean of the annual rate of return for each stock. Which stock is preferable by this measure? (b) Compute the geometric mean of the annual rate of return for each stock. Which stock is preferable by this measure? (c) Compute the standard deviation of the annual rate of return for each stock. Which stock is preferable by this measure?Meridian Manufacturing, Inc.'s stock has had the following annual returns over the past 5 years: +14.2%; -9.8%. +32.6%, -19.8%, and +27.9%. Using the proper method for calculating investment returns, what is the 5-year return on Meridian Manufacturing's stock? ROUND YOUR ANSWER TO ONE DECIMAL PLACE, AND DO NOT ENTER THE PERCENT SIGN (i.e. 10.5% should be entered as 10.5)The rates of return on Cherry Jalopies, Inc., stock over the last five years were 23 percent, 11 percent, -5 percent, 7 percent, and 10 percent. What is the geometric return for Cherry Jalopies, Inc.? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Geometric return %
- Tom Teller, Inc.'s stock has had the following annual returns over the past 5 years: +14.2%; -9.8%. +32.6%, -19.8%, and +27.9%. Using the proper method for calculating investment returns, what is the 5-year return on Meridian Manufacturing's stock?Suppose you bought a stock for $50 on January 1st. Six months later you received a dividend of $1.10 and you sold the stock for $53.30. Given this information, annualized return is ______________. answer is 17.6%(Solving a comprehensive problem) Use the end-of-year stock price data in the popup window,, to answer the following questions for the Harris and Pinwheel companies. a. Compute the annual rates of return for each time period and for both firms. b. Calculate both the arithmetic and the geometric mean rates of return for the entire three-year period using your annual rates of return from part a. (Note: you may assume that neither firm pays any dividends.) c. Compute a three-year rate of return spanning the entire period (i.e., using the ending price for period 1 and ending price for period 4). d. Since the rate of return calculated in part c is a three-year rate of return, convert it to an annual rate of return by using the following equation: 1 + Three-Year Rate of Return 1 + Annual Rate of Return 3 e. How is the annual rate of return calculated in part d related to the geometric rate of return? When you are evaluating the performance of an investment that has been held for several…