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 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: High price Low price: EPS Year 1. $62.18 40.30 2.35 a. High target price. b. Low target price Year 21 $ 67.29 43.18 Year 31 $74.18 39.27 2.73 Earnings are expected to grow at 9 percent over the next year. o. What is the high target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the low target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. D Year 4. $78.27 46.21 2.89

1. HEJO company has the current stock price of $20 today. Use a 1 step binomial tree to estimate the price of a oneyear call on thisstock. Assume the price can increase or decrease by 10% in in the next year with equal likelihood. Risk free rate is 2%, the strike is $21. A. Find the hedge ratio(H), (make sure have the correct sign, this will be written out as a decimal B) Find the call's value  or price today Note: Show the calculation without using excel.

(Expected return and risk) The following data represent returns for the common stocks over a one-year period. Probability Returns Google -20% 8.5% 21% -18% 4.6% 0.1 0.2 0.2 0.3 0.2 ATT -19% 4% 10% 20% -6% The standard deviation of Google return is %. (Keep the sign and two decimal numbers.)

A stock price P0=$23, and is expected to pay D1 = $1.242 one year from now and to grow at a constant rate of g=8% in the future.  Suppose this analysis was conducted in January 1, 2002, what is the expected price at the end of 2002 and what is the Capital gains yield?

.An analyst believes that economic conditions during the next year will either be strong, normal, or weak, and she thinks that the Corrigan Company's returns will have the following probability distribution. Conditions Probability (%) Return (%) Strong         30                     30 Normal        40                    15 Weak         30                     -10 What is Corrigan’s expected return? What is Corrigan’s standard deviation of returns?

An analyst gathered the following information for a stock and market parameters: stock beta= 1.08; • expected return on the Market = 11.97%; • expected return on T-bills = 1.55%; • current stock Price = $9.01; • expected stock price in one year = $11.14; • expected dividend payment next year = $3.23. Calculate the expected return for this stock. Please share your answer as a percentage rounded to 2 decimal places.

A security analyst has regressed the monthly returns on Exxon Mobil equity shares over the past five years against those on the Standard & Poor's 500 stock index over the same period. The resulting regression equation is rEM = 0.08 + 1.44 rSP. Use this equation to estimate Exxon Mobil's equity beta.

Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 31% per year. Assume these values are representative of investors' expectations for future performance and that the current T-bill rate is 3%. Calculate the utility levels of each portfolio for an investor with A = 2. Assume the utility function is u = E(r) 0.5 × Ao². Note: Do not round intermediate calculations. Round your answers to 4 decimal places. Negative amounts should be indicated by a minus sign. WBills 0.0 0.2 0.4 0.6 0.8 1.0 Windex 1.0 0.8 0.6 0.4 0.2 0.0 U(A = 2)

Stock W has the following returns for various states of the economy: State of the Economy Probability Stock W's Return Recession 0.15 -10% Below Average 0.20 5% Average 0.30 8% Above Average 0.25 12% Boom 0.10 18% Stock W’s Sharpe ratio assuming the risk-free is 1.25%

Calculating Real Returns and Risk Premiums You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 13 percent, −8 percent, 16 percent, 16 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent and the average T-bill rate over the period was 5 percent.   a. What was the average real return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average nominal risk premium on the company's stock?