13 QS

A stock just paid a dividend of D0 = $1.2. The required rate of return is rs = 19.9%, and the constant growth rate is g = 3.8%. What is the current stock price?
Question 1 The spot rate for the pound is £0.6539 = $1 and the spot rate for the Canadian dollar is C$1.2825 = $1. What is the £/C$ cross rate?
Question 4 ABC Company's last dividend was $2.8. The dividend growth rate is expected to be constant at 8% for 3 years, after which dividends are expected to grow at a rate of 4% forever. The firm's required return (rs) is 14%. What is its current stock price (i.e. solve for Po)?

Question 5 One year ago, you puchased 79 shares of ABC stock for $21.4 per share. During the year, you received a dividend of $3.2 per share. Today, you sold all your shares for $25.6. What are the percentage return on your investment?

Question 6 The common stock of ABC Industries is valued at $41.1 a share. The company increases their dividend by 4.5 percent annually and expects their next dividend to be $1.53. What is the required rate of return on this stock?

Question 7 You want to create a portfolio as risky as the market. Suppose you invest your money in Stocks A, B, C, and the risk-free asset. What is the weight of Stock C in your portfolio? Stock Weights(%) Beta A 11 1.3 B 16 0.3 C ? 1.3 Rf ? ?


Question 8 The risk-free rate is 6.8%, the market risk premium is 10.3%, and the stock’s beta is 0.42. What is the cost of common stock?

Question 11 The ABC Co. has $1,000 face value stock outstanding with a market price of $873.6. The stock pays interest annually, matures in 15 years, and has a yield to maturity of 9.9 percent. What is the annual coupon amount?

Question 12 Suppose the nominal rate is 21.9% and the inflation rate is 5.3%. Solve for the real rate. Use the Fisher Equation to get your anser.

Question 13 If the market value of debt is $184,070, market value of preferred stock is $178,165, and market value of common equity is 128,910, what is the weight of preferred stock?

Question 14 The ABC Company has a cost of equity of 9 percent, a pre-tax cost of debt of 7.7 percent, and a tax rate of 25 percent. What is the firm’s weighted average cost of capital if the weight of debt is 53 percent?



Question 17 You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. One stock has a beta of 1.93. What does the beta of the second stock have to be if you want the portfolio to have a beta of 0.61?

Question 18 Suppose the exchange rate is $1.3456 per euro. If the euro appreciates by 17% against the dollar, how many euros would a dollar buy tomorrow?

Question 19 Suppose that today's stock price is $39.5. If the required rate on equity is 15.1% and the growth rate is 7.1%, compute the expected dividend (i.e. compute D1)

Question 24 Below is the stock split data for ABC Company

If you bought 8,952 shares in the beginning of 1990 and during the period of 10 years never bought or sold additional shares, how many shares would you have by the end of 1999?
Stock
splits

Question 27 ABC, Inc. has 6 percent bonds outstanding that mature in 13 years. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $993 each. What is the firm's after-tax cost of debt if the tax rate is 38%?

Question 28 You are planning an extended trip to Brazil to enjoy the World Cup Tournament.. You have estimated your expenses during this trip to be 38,674 Brazilian real. What is the cost in U.S. dollars if one U.S. dollar is worth 2.7192 Brazililan real?

12 years ago

Report issue

assignment

NOT RATED

Purchase the answer to view it

i3-_q.xls