Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Question
Chapter 6, Problem 2MC
Summary Introduction
To determine: The monthly holding period return and standard deviation for S&P, Company W and Company T.
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Assuming that all sales were on account, calculate the following risk ratios for 2024.
Risk Ratios1. Receivables turnover ratio 38.3 times2. Average collection period 9.5 days3. Inventory turnover ratio 15.1 times4. Average days in inventory 24.2 days5. Current ratio 4.0 6. Acid-test ratio ? 7. Debt to equity ratio ? %8. Times interest earned ratio ? times
Directions: Compute the total returns, the average of returns, and the standard deviation of
the following stocks:
1)
2)
EGRH Inc.
MP, Ltd.
STOCK RETURN
AVERAGE
OF
YEA
AVERAGE
OF
RETURNS
(x)
YEAR
STOCK RETURN
PRICE (x₁)
PRICE
RETU
Jan-2021
Po
Feb-2021
P8.6
Jan-2021 PO.
Feb-2021 PO.090
Mar-2021 P0.097
Apr-2021 PO.189
May-2021 PO.164
Mar-2021
P9.14
Apr-2021 P13.30
May-2021 P13
Jun-2021
P60
Jul-2021
16.94
Jun-2021 P0.495
Jul-2021 PO.28
Aug-2021 PO
Sep-2021 90
Aug-202 P13.70
Sep-2
P14.88
Oct-2021 0.375
Oct 21 P15.30
Nov-20 PO.325
N2021
P14.30
Dec-2
PO.330
ec-2021
P15.52
3)
SD (8)
GSM Inc.
STOCK
YEAR
PRICE
Jan-2021 P57.70
Feb-2021 P52.90
Mar-2021 P50.95
Apr-2021 P58.25
May-2021 P74.05
Jun-2021 P94.75
Jul-2021 P85.00
Aug-2021 P105.00
Sep-2021 P114.00
Oct-2021 | P101.00
Nov-2021 P100.40
Dec-2021 P113.80
SD (8) =
RETURN
(x₁)
-x)²
AVERAGE
OF
RETURNS (x-x)²
(x)
SD (8) =
ACEE, Inc.
YEAR
STOCK RETURN
PRICE
(x₁)
Jan-2021
P13.56
Feb-2021 P20.80
Mar-2021 P22.50
Apr-2021 P18.90
May-2021 P17.00…
PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2021 and 2020
2021
2020
Assets
Current assets:
Cash
Accounts receivable
Inventory
Investments
$242,000
98,000
105,000
5,000
$ 130,000
102,000
90,000
3,000
Long-term assets:
Land
Equipment
Less: Accumulated depreciation
580,000
890,000
(528,000)
$1,392,000
580,000
770,000
(368,000)
$1,307,000
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Interest payab le
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
Retained earnings
$ 109,000
7,000
9,000
95,000
13,000
6,000
2$
110,000
220,000
800,000
357,000
$1,392,000 $1,307,000
800,000
173,000
Total liabilities and stockholders' equity
Additional information for 2021:
1. Net income is $184,000.
2. Sales on account are $1,890,000.
3. Cost of goods sold is $1,394,250.
Chapter 6 Solutions
Foundations Of Finance
Ch. 6 - a. What is meant by the investors required rate of...Ch. 6 - Prob. 2RQCh. 6 - What is a beta? How is it used to calculate r, the...Ch. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - What effect will diversifying your portfolio have...Ch. 6 - (Expected return and risk) Universal Corporation...Ch. 6 - (Average expected return and risk) Given the...
Ch. 6 - (Expected rate of return and risk) Carter, Inc. is...Ch. 6 - (Expected rate of return and risk) Summerville,...Ch. 6 - Prob. 5SPCh. 6 - Prob. 9SPCh. 6 - Prob. 10SPCh. 6 - Prob. 11SPCh. 6 - Prob. 12SPCh. 6 - Prob. 14SPCh. 6 - (Capital asset pricing model) Using the CAPM,...Ch. 6 - Prob. 16SPCh. 6 - Prob. 17SPCh. 6 - a. Compute an appropriate rate of return for Intel...Ch. 6 - (Estimating beta) From the graph in the right...Ch. 6 - Prob. 20SPCh. 6 - Prob. 21SPCh. 6 - (Capital asset pricing model) The expected return...Ch. 6 - (Portfolio beta and security market line) You own...Ch. 6 - (Portfolio beta) Assume you have the following...Ch. 6 - Prob. 1MCCh. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - Prob. 5MCCh. 6 - Prob. 6MCCh. 6 - Prob. 7MCCh. 6 - Prob. 8MCCh. 6 - Prob. 9MCCh. 6 - Prob. 10MCCh. 6 - Prob. 11MC
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