You want to invest in Costco Stock and would like to know the potential returns of the stock. You notice that COST has a beta of 0.67. You look up the 10-year treasury bond Yield to Maturity (YTM) and notice the going rate of return on T-Bills is 3.78%. You are given that the market return for COST stock and its sector is 5%. What is the estimated rate of return on COS

Q: You have bought a stock for a $100. You are expecting to get a return of 10% while the volatility of…

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Q: have been asked to calculate the required return for a stock that you are considering investing in.…

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Q: Your broker has recommended that you purchase stock in Alacan, Inc. She estimates that the 1-year…

A: Cost of equity = Rf + Beta * ( Rm - Rf ) = 2.70% + 0.91 * 9.50% = 2.70% + 8.645% = 11.345%

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Q: estimate that the stock has a required rate of 18%. What is the intrinsic value of this stock?

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Q: Blast! stock has a beta of 1.4 and is currently selling for $16. Your DCF analysis indicates that…

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Q: what does the market believe will be the stock price at the end of 3 years?

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Q: Bulldogs Co. has a collection of publicly traded stocks. The value of each security and its stock…

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.