Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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The attached file contains hypothetical data for working this problem. Goodman Corporation’s and Landry Incorporated’s stock prices and dividends, along with the Market Index, are shown in the file. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends.
Estimate Goodman’s and Landry’s betas as the slopes of regression lines with stock returns on the vertical axis (y-axis) and market return on the horizontal axis (x-axis). (Hint: use Excel’s SLOPE function.) Are these betas consistent with your graph?
Assume you are given the following abbreviated financial statement. (look at the picture sent)
On the basis of this information, calculate as many liquidity, activity, leverage, profitability, and common stock measures as you can. (Note: Assume the current market price of the common stock is $75 per share.)
The attached file contains hypothetical data for working this problem. Goodman Corporation’s and Landry Incorporated’s stock prices and dividends, along with the Market Index, are shown in the file. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends.
Calculate the standard deviation of the returns for Goodman, Landry, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV function in Excel.)
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- Using the data in the following table,, estimate the: a. Average return and volatility for each stock. b. Covariance between the stocks. c. Correlation between these two stocks. a. Estimate the average return and volatility for each stock. The average return of stock A is %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 2010 2011 20% 2013 - 1% - 13% Stock A Stock B 20% 12% - 9% Print 2012 8% 9% C Done 2014 4% - 9% 2015 11% 27% - Xarrow_forwardUsing the data in the following table, immediately. 9 calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock The realized return from January 2, 2008, to January 2, 2009 is Data table %. (Round to two decimal places.) (Click on the following icon in order to copy its contents into a spreadsheet.) Dividend Historical Stock and Dividend Data for Boeing Date 1/3/2011 2/9/2011 5/11/2011 8/10/2011 11/8/2011 1/3/2012 Date 1/2/2008 2/6/2008 5/7/2008 8/6/2008 11/5/2008 1/2/2009 Price $87.75 $79.76 $85.01 $66.77 $47.75 $44.02 $0.37 $0.37 $0.37 $0.00 Print Done Price $67.58 $70.28 $80.89 $56.25 $64.88 $74.91 Dividend $0.41 $0.41 $0.41 $0.41 I Xarrow_forwardThe company stock ticker symbol is PTC. Discuss the past performance of the stock (such as historical trading range). Illustrate with at least two charts of prices over time: one for long term (>= 1 year) and one for short term (<1 year). Also discuss briefly both the overall long term and short-term performance/price behavior.arrow_forward
- Using the data in the following table, calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock immediately. The realized return from January 2, 2008, to January 2, 2009 is %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Historical Stock and Dividend Data for Boeing Dividend Date 1/3/2011 2/9/2011 5/11/2011 8/10/2011 11/8/2011 1/3/2012 Date 1/2/2008 2/6/2008 5/7/2008 8/6/2008 11/5/2008 1/2/2009 Price $84.35 $80.07 $85.71 $63.71 $47.44 $44.97 $0.39 $0.39 $0.39 $0.00 Print Done Price $66.08 $72.91 $78.83 $55.86 $64.37 $75.65 Dividend $0.41 $0.41 $0.41 $0.41 Xarrow_forwardUsing the data in the following table,, estimate the: a. Average return and volatility for each stock. b. Covariance between the stocks. c. Correlation between these two stocks. a. Estimate the average return and volatility for each stock. The average return of stock A is %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year Stock A 2010 2011 2012 2013 2014 2015 - 1% 6% 2% -5% 4% 6% Stock B 20% 9% 8% -3% - 5% 21% Print Done ☑ Cleararrow_forwardUsing the data in the following table,, estimate the: a. Average return and volatility for each stock. b. Covariance between the stocks. c. Correlation between these two stocks. a. Estimate the average return and volatility for each stock. The average return of stock Ais %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 2010 2011 2013 Stock A - 5% 17% - 6% Stock B 29% 21% - 1% 2012 7% 4% 2014 1% - 15% 2015 13% 20%arrow_forward
- Using the data in the following table, calculate the return for investing in the stock from January 1 to December 31. Prices are after the dividend has been paid. The realized return for the entire period is%. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Stock and Dividend Data Price $31.49 $29.52 $30.58 $31.41 $36.79 $43.08 Date Jan 1 Feb 5 May 14 Aug 13 Nov 12 Dec 31 Dividend $0.17 $0.22 $0.21 $0.21 - Xarrow_forwardUsing the data in the following table,, calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock immediately. The realized return from January 2, 2008, to January 2, 2009 is%. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Dividend Historical Stock and Dividend Data for Boeing Date 1/3/2011 2/9/2011 5/11/2011 8/10/2011 11/8/2011 1/3/2012 Date 1/2/2008 2/6/2008 5/7/2008 8/6/2008 11/5/2008 1/2/2009 Price $84.12 $77.43 $83.47 $64.69 $49.19 $44.46 $0.37 $0.37 $0.37 $0.00 Print Done Price $66.31 $72.71 $78.82 $56.87 $64.67 $73.36 Dividend $0.41 $0.41 $0.41 $0.41 - Xarrow_forwardUsing the data in the following table,, estimate the: a. Average return and volatility for each stock. b. Covariance between the stocks. c. Correlation between these two stocks. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 2010 2011 2013 Stock A - 10% 20% - 5% Stock B 21% 7% - 3% 2012 5% 30% 2014 2% - 8% 2015 9% 25% Iarrow_forward
- Using the data in the table to the right, calculate the return for investing in the stock from January 1 to December 31. Prices are after the dividend has been paid. (Click on the following icon in order to copy its contents into a spreadsheet.) Return for the entire period is %. (Round to two decimal places.) Date Jan 1 Feb 5 May 14 Aug 13 Nov 12 Dec 31 Price $32.09 $30.63 $31.95 $31.34 $36.15 $40.39 Dividend $0.21 $0.18 $0.18 $0.21arrow_forwardThe following table represents the rate of returns of two stocks in different economic conditions along with their probabilities (the data are also uploaded on moodle) RATES OF RETURN ON STOCKS EXPECTED ECONOMIC PROBABILITY STOCK A STOCK B CONDITIONS RECESSION 0.55 -0.04 -0.02 STABLE 0.35 0.25 0.30 EXPANDING 0.10 0.15 0.20 Answer the following by using mathematical calculations: a) Calculate the expected rate of return for each stock respectively. Explain what the expected value implies. b) Calculate the standard deviation for each stock respectively. Explain what the standard deviation implies. c) If you were an investor in which stock you were going to invest? Justify your answer. d) Calculate the covariance between Stock A and stock B. Discuss. e) Calculate the expected return and the standard deviation of the portfolio consisting 40% in stock A and 60% in stock B. f) Discuss the risk and return associated with investing i All of your funds in stock A ii. All of your funds in stock…arrow_forward1. Stock WatcherMark Martin has created a basic stock watcher worksheet that he uses to report on gains or losses from when he purchased the stock and the last recorded date and price. Mark has given you a snapshot of his spreadsheet (see Figure T2.20) that you can use to re-create this spreadsheet for yourself. Here are some basic steps to follow:1. Create a new workbook.2 . Enter all the information provided in Figure T2.20 . 3. Apply the Currency format to the respective columns.4. The date should be entered as a function. Hint: Use the NOW function.5. Enter a formula for the Gain/Loss (%) column. Hint: You should subtract the Last columnfrom the Purchase column, and then divide by the Purchase column.6 . Format for percent in the Gain/Loss (%) column.arrow_forward
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