Suppose that investors cumulatively short-sell 6 million shares of a stock and the meantime, the stock pays a dividend of $20 per share. What is the total a position? You can ignore shorting fees and assume all interest rates are zero). O A. $5.5 billion B. $7.3 billion C. $6.1 billion D. $4.3 billion
Q: What is the market price of a share of stock for a firm with 100,000 shares $3,000,000, and a…
A: The market price of share affected by many type of factors. Market to book ratio States the total…
Q: Axon Industries needs to raise $22.41M for a new investment project. If the firm issues one-year…
A: The real expense experienced by a business or person when seeking finances or financing for various…
Q: Company Z-prime’s earnings and dividends per share are expected to grow by 3% a year. Its growth…
A: The Dividend Discount Model (DDM) is a financial valuation approach used to estimate the intrinsic…
Q: The weighted average cost of capital is and the FCFS are expected to continue, year 5. The growing…
A: The value of company can be found as the present value of free cash flow of the project and terminal…
Q: Meridian Manufacturing, Inc.'s stock has had the following annual returns over the past 5 years:…
A: CAGR stands for Compound Annual Growth Rate. It is a financial metric used to measure the annual…
Q: Haulsee Inc. pays no dividend currently but is expected to start paying a small dividend next year.…
A: According to Capital asset pricing model ,ke = Rf+[b*(Rm-Rf)]whereke= cost of equityRf = risk free…
Q: Fidelity bond does not cover
A: Fidelity bonds are a form of insurance policy that offers protection against losses due from…
Q: I bought AEO stock on 8/14/2018 for $28.02 and then collected $0.1375 dividend on 10/11/2018 and…
A: The annualized rate of return is the return in percentage terms that an investor can expect from the…
Q: You have determined that Tesla (TSLA) is worth $255.00, and that you would be willing to pay no more…
A: Given the information:Your valuation for Tesla (TSLA) is $255.00.You're willing to pay no more than…
Q: is targeting specific debt levels in the future. Cost of de ate is 4% and the expected market risk…
A: Cost of debt = 7%Risk free rate = 4%Expected market risk premium = 6%Unlevered asset beta = 1
Q: Moorcroft Company's budgeted sales and direct materials purchases are as follows: Budgeted Sales…
A: Variables in the question: AprilMayJuneBudgeted Sales ($)293000343000386000Cash sale=40%Credit…
Q: What is the profitability index of a project that costs $10,000 and provides cash flows of $3,500 in…
A: The relationship between cash inflows and outflows at their current values is known as the…
Q: Exercise 5-7 (Algo) Solving for unknowns; single amounts [LO5-4) or each of the following situations…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: Suppose you deposited $39,000 in a bank account that pays 5.25% WI daily compounding based on a…
A: Future value is the amount initially deposited and amount of comounding interest accumulated over…
Q: You are evaluating a company that is growing quickly. Dividends are expected to grow at a rate of 30…
A: Solution:Gordon Growth Model (GGM) is the equity model which measures current price of share.For the…
Q: A project requires an initial investment of $100,000 and is expected to produce a cash inflow before…
A: Companies can allocate their limited resources (capital) to projects or assets with the highest…
Q: Interest expense for Rhodes Manufacturing was $500,000 in 2018. During 2018, $3.7 million in old…
A: Cash flows to bond holders will be interest paid, debt repaid and new debt raised. Cash flows to…
Q: You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The…
A: Face Value = $1,000Coupon Rate = 12%Time Period = 25 YearsYield To Maturity = 12%
Q: What's the interest rate of a 5-year, annual $5,400 annuity with present value of $22,000? (Use a…
A: As per Bartleby honor code, when multiple questions are asked, the expert is required only to solve…
Q: iger Golf Supplies has $21 million in earnings with 6 million shares outstanding. Its investment…
A: Total Earning = te = $21 millionNumber of Shares = n = 6 millionPrice to Earning Ratio = pe =…
Q: In the capital asset pricing model, the expected return on an asset with a beta equall to zero would…
A: Solution:-Capital Asset Pricing Model (CAPM) is a model which gives a formula to calculate the…
Q: Helene Yes! In fact we have that available. Calculate company profit using the alternate exchange…
A: Variables in the question:Revenue (in Euros)=294000Net income (in Euros)=196000EUR:USD=1.31 (i.e.,…
Q: McCue Inc.'s bonds currently sell for $1,063. They pay a $80 annual coupon, have a 28-year maturity,…
A: A bond is a kind of debt security issued by the government and private companies to the public for…
Q: Star Bank has the following asset portfolio on its balance sheet (and zero off-balance-sheet…
A: Risk weighted asset:A risk-weighted asset refers to an asset held by a financial institution that is…
Q: Maxwell's annual financial statements show operating profit before interest and tax of $1,038,466…
A: A tax shield is a reduction in taxable income that results from various allowable deductions,…
Q: A bank offers 35-year, $175,000 mortgages at 4.6 percent and charges a $3,600 refundable loan…
A: Annual percentage rate refers to the rate of interest to be borne on the mortgage created. Expenses…
Q: The major area of vulnerability for many entrepreneurs is accounts receivable. true or false
A: Entrepreneur is an individual who identifies and creates opportunities to start, develop and manage…
Q: Find the accumulated value 32 years after the first payment is made of an annuity on which there are…
A: Future value (FV) is the value of an investment or asset at a specified point in the future based on…
Q: As the CEO of a western wear manufacturing company called Over Y'alls. Your marketing department has…
A: NPV refers to the net present value of the project or capital investment which can be determined by…
Q: Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a…
A: For Quick and Dirty system:Initial cost= $12,000,000Number of useful life = 4 YearsOperating cost=…
Q: Which one of these occurs at the financial break-even point? Fixed costs equal variable costs EBIT…
A: The break-even point is the situation in which the contribution by the company equals the fixed cost…
Q: A fast growing firm paid a dividend of $1.00 per share during the most recent year, The dividend is…
A: Solution:Gordon Growth Model (GGM) is the equity model which measures current price of share.For the…
Q: 1. Blue Air Inc., has net sales of $723,000 and accounts receivables of $165,000. What are the…
A: Accounts receivable turnover measures how much times are the net sales of the firm in comparison of…
Q: Lalaland Inc is considering a project that requires an investment of $21,000 in NWC (in year 0) and…
A: Net Present Value (NPV) is one of the tools used in capital budgeting to make an analysis of the…
Q: When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers o her grave every…
A: Initial price (P) = $5Interest rate = 10.4% per annum Growth rate = 3.8% per annumBoth these rates…
Q: If the market's required rate of return is 10% and the risk-free rate is 6%, what is the fund's…
A: The capital asset pricing model aids analysts and investors in calculating the expected return on…
Q: What is the future value in 2 years if you invest $150 at the beginning of each month for 10 months…
A: Future value of investment is the amount of investment done and amount of interest accumulated.
Q: I bought ANF stock on 8/14/2018 for $29.26 and then collected $0.20 dividends on 09/06/2018 and then…
A: The annualized return rate can be found by using the n in terms of years. The price of the stock at…
Q: Calculate the elasticity of a call option with a premium of $5.00 and a strike price of $69. The…
A: A Call Option is a financial contract that gives the holder the right, but not the obligation, to…
Q: a. Which investment has the higher IRR? The IRR of investment A is ... %. (Round to the nearest…
A: In capital budgeting and other type of analysis the internal rate of determ is said to be the date…
Q: A BBB-rated corporate bond has a yield to maturity of 10.5%. AUS Treasury security has a yield to…
A: Bonds are debt securities or fixed-income investments that represent a loan made by an investor to a…
Q: April decided to deposit $8,000 into a CD that offers her an APR of 4.4 percent with quarterly…
A: Future value is computed by following formula:-FV =A*(1+r)nFV = future value A =amount investedr =…
Q: 14.7. A company in Calgary serves a market in the northwestern United States. Now it ships LTL at an…
A: Variables in the question:Average cost per unit=$30If the company establishes a distribution…
Q: How much would you have in savings if you kept $200 on deposit for eight years at 8%, compounded…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: ulate the internal rate of return for a $300.0m cash outflow at the end of year 0 and a $716.0m cash…
A: Internal rate of return is the break even rate at which present value of future cash flow is equal…
Q: the first year followed by a cash payment of $625,000 at the end of the second year. Use the IRR…
A: IRR (Internal Rate of Return):IRR is the discount rate at which the net present value (NPV) of cash…
Q: Assume that a company is considering a capital investment project with a four-year time horizon and…
A: profitability index = 2. Present value of Total cash inflows = Present value of cash inflows +…
Q: A 30-year mortgage has an annual interest rate of 6 percent and a loan amount of $260,000. (Hint:…
A: The CUMPRINC function in Excel is used to compute the total principal payments on a loan or mortgage…
Q: Which of the following independent projects should the company accept?
A: IRR is the internal rate of return. This is the return % that the project generates. If the IRR is…
Q: The past five monthly returns for Kohls are 3.80 percent, 4.27 percent, -1.94 percent, 9.38 percent,…
A: Number of returns (n) = 5Average return is know as arithmetic average return.
Step by step
Solved in 3 steps with 1 images
- d. What is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if Xtel is selling after 1 year at: (i) $83.62; (ii) $74; (iii) $64.38? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel pays no dividends. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) Rate of return for ear. i.) ? ii.) ? iii.) -22.51Suppose there is a large probability that L will default on its debt. For the purpose of this example, assume that the value of Ls operations is 4 million (the value of its debt plus equity). Assume also that its debt consists of 1-year, zero coupon bonds with a face value of 2 million. Finally, assume that Ls volatility, , is 0.60 and that the risk-free rate rRF is 6%.3. You deposited P100,000 cash in brokerage account and short sell P200,000 of stocks on margin. Later the value of the stocks held short rises to P250,000. What is your account margin in percent?
- Q 2.3. An investment costs $1,000 and pays a return of $1,050. What is its rate of return? Q 2.4. An investment costs $1,000 and pays a net re Q 2.6. You buy a stock for $40 per share today. you can sell it for $45 right after the dividend is paid, what would be its dividend yield, what would be its capital gain (also quoted as a capital gain yield), and what would be its total rate of return? It will a dividend of $1 next month. If alck Com ratSuppose you buy OMR2000 worth of stock on margin. The initial margin is 60% and the maintenance margin is 30%. a. How much have you borrowed? What is your equity? b. Suppose the value of the stock rises by 15% to OMR2300. What is the return on your investment? c. Suppose the value of the stock falls by 15% to OMR1700. What is the return on your investment? d. Does buying a stock on margin increase or decrease your risk of investment? Use the results in parts b and c to answer the question.Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year, is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is 11%, at what price will the stock sell? a.Less than $100 b.More than $100 c.$100 d.$111
- Suppose you have just purchased a share of stock for $58.50. You expect a dividend next period of $2.50 which will grow at a rate of 15% indefinitely. What must your expected rate of return be on the stock you have just purchased? Select one: A. 4.27% B. 15.38% C. 19.27% D. 19.91% E. None of the above(TCO D) A stock pays an annual dividend of $2.50 and that dividend is not expected to change. Similar stocks pay a return of 10%. What is PO?Suppose the stock of Company J pays no dividends and has a current price of $90.00. The forward price for delivery in 1 year is $93.60, and the effective annual interest rate is 4%. What would be the profit on a short forward position if the stock price is $109.80 when the forward contract expires? a. $16.20 b $3.60 c $-16.20 d $19.80 e $-19.80
- 1. If the required rate of return is 5 percent and the stock pays a fixed S5 dividend, its value is • A. $100 • B. $75 • C. S10 • D. $50 2.The P/E ratio is determined by • A. The required rate of return. • B. The expected dividend payout ratio. • C. The expected growth rate of dividends. • D. Choices a and b • E. All of the aboveAn equity share costing Rs.100/- pays no dividends. The possible prices that the share might sell for at year end and, the respective probability are as follows: 一T Year end Price (Rs) Probability 90.00 0.1 100.00 0.2 105.00 0.4 110.00 0.2 120.00 0.1 a) What is the expected return of the share? b) What is the standard deviation of the share?Y6 Consider a stock priced at $40 that pays an annual dividend of $ 1 per share. An investor purchases the stock on margin, paying $20 per share and borrowing the remainder from the brokerage firm at 10 percent annual interest. a. If, after one year, the stock is sold at a price of $60 per share, what is the return on the stock? b. If investors had used only personal funds rather than borrowing funds, what would have been the stock return?
