Z has an equity beta of 1.35. XYZ’s equity value is $1,200. XYZ has US dollar net debt of $300 and euro-denominated debt of $700. Assume currency beta of euro is 0.20. What is
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XYZ has an equity beta of 1.35. XYZ’s equity value is $1,200. XYZ has US dollar net debt of $300 and euro-denominated debt of $700. Assume currency beta of euro is 0.20. What is XYZ’s operating beta?
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- Nodebt Inc. is a firm with all-equity financing. Its equity beta is 0.80. The Treasury bill rate is 5%, and the market risk premium is expected to be 10%. a. What is Nodebt's asset beta? (Round your answer to 2 decimal places.) Asset beta b. What is Nodebt's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) WACC %Nodebt Inc. is a firm with all-equity financing. Its equity beta is 0.80. The Treasury bill rate is 3%, and the market risk premium is expected to be 7%. a. What is Nodebt’s asset beta? (Round your answer to 2 decimal places.) b. What is Nodebt’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)a) You observe the following quotes for the USD/AUD in the spot market from two banks: Bank of Sydney Bank of New York Bid Ask Bid Ask 0.71711 0.71715 0.71708 0.71715 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use AUD 25,000. If not, explain why arbitrage is not possible? (b) You observe the following quotes for the GBP /AUD in the spot market from two banks: Bank of Melbourne Bank of London Bid Ask Bid Ask 0.5458 0.5459 0.5514 0.5515 Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculate the potential profit if you are able to use GBP 50,000. If not, explain why arbitrage is not possible? c) You observe the following quotes for the EUR / USD in the spot market from two banks: Deutsche Bank Bank of America Bid Ask Bid Ask 1.18102 1.18102 1.18094 1.18100 Do these quotes imply the…
- Citibank quotes NZ$1 = US$ 0.6624. Deutsche Bank quotes € 1 = US$1.1758.BNZ Bank quotes€ 1 = NZ$1.7762.a. If these quotes are simultaneously observed spot rates, can you make an arbitrage profit? Ifso, calculate what profit would you make if you started with NZ$ 1 million. Assume thatthere are no transaction costs. b. What would be your arbitrage profit if you were to incur total transaction costs of 0.1% of theamount used for conversions?You observe the following quotes for the USD/AUD in the spot market from two banks:Bank of Sydney /Bank of New YorkBid Ask/ Bid Ask0.71711 0.71715 /0.71708 0.71715Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculatethe potential profit if you are able to use AUD 25,000. If not, explain why arbitrage is not possible?(b) You observe the following quotes for the GBP /AUD in the spot market from two banks:Bank of Melbourne/ Bank of LondonBid Ask/ Bid Ask0.5458 0.5459 /0.5514 0.5515Do these quotes imply the possibility of earning a profit by using locational arbitrage? If so, calculatethe potential profit if you are able to use GBP 50,000. If not, explain why arbitrage is not possible?c) You observe the following quotes for the EUR / USD in the spot market from two banks:Deutsche Bank/ Bank of AmericaBid Ask /Bid Ask1.18102 1.18102 /1.18094 1.18100Do these quotes imply the possibility of earning a profit by using locational arbitrage? If…Dhofar Silicon Services has a Beta = 2.42 The risk free rate on a treasury bill is currently 8.2% and the market return has averaged 16%.What is the cost of equity ? O a. All the given answers in this question are not correct O b. 0.46 O c. 0.2708 O d. 0.19 O e. 0.4692 | https://moodle1.du.edu ENG ailo 91% F2 F3 F10 F4 F5 F7 F8 F9 @ %23 24 % & 2 3 4. 6 8. R Y U 10 A S DEFJ GYH1J - K C V BY NiM IS Alt この > 1.
- In search of arbitrage profits in the forex market, you ring ANZ bank and Commonwealth bank. Both are Australia commercial bank. These two banks offer you the following quotes for the USD at the same time: MYR/USD 1.1650- 1.1670 UOB Bank HSBC Bank MYR/USD 1.1640- 1.1660 Illustrate your calculation start with RM1 million. Can you make an arbitrage profit with these quotes?Which of the following statements is false? A. Basel II use the value at risk (VaR) with a one-year time horizon and a 99.9% confidence level for calculating capital for credit risk and operational risk. B. 20 BP = 0.2% C. Basel I is increasing the amount of capital that banks are required to hold and the proportion of that capital that must be equity. D. Model-building approach is a model for the joint distribution of changes in market variables and using historical data to estimate the model parameters.The DestitutusVentis Company (DV Co) has the following items on its balance sheet (question mark means that the quantity is unknown): Type of asset/liability Market value Risk (beta) Cash holdings £20m 0 Fixed investments £180m ? Short term debt £10m 0 Long term debt £70m 0.05 Equity £120m 1.1 The risk-free rate is 3%, and the average return on the market index is 7%. The number of shares outstanding for DV Co is 100m. The corporate and investor tax rates are zero. Modigliani-Miller irrelevance of dividend policy and capital structure holds. What is the weighted average cost of capital (WACC) for DV Co? The company plans to pay a dividend per share of £0.10, which is funded by increasing the company’s long-term debt correspondingly. The new debt has the same beta as the old long-term debt. What is the value per share of the DV Co’s stock on ex-dividend day if the dividend payment goes ahead? What is the beta of the equity on…
- Dhofar Energy Services has a Beta = 1.68 The risk-free rate on a treasury bill is currently 4.4% and the cost of equity has 20.70%. What is the market return? Select one: a. 0.1410 b. 1.0970 c. All the given choices are not correct d. 0.1654 e. 0.2369Suppose Pepsi Co. has a beta of 0.7, whereas the beta of Microsoft is 1.1. The risk free interest rate is 3% and the market risk premium is 6%. a. What is the expected return of Pepsi Co. according to CAPM? b. What is the expected return of Microsoft according to the CAPM?Dhofar Silicon Services has a B(Beta)= 1.4.The risk free rate on a treasury bill is currently 8.2% and the cost of equity is 0.1912, what is the market return. Select one: a. None b. 0.19 c. 0.16 d. 0.11 e. 0.14