Investment Homework/Formula Calculation help needed

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Sheet1

Assume a particular stock has an annual standard deviation of 41 percent. What is the standard deviation for a four-month period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Answer

Sheet2

Assume the monthly standard deviation of a stock is 8.60 percent. What is the annual standard deviation of the stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Assume the monthly standard deviation of a stock is 9.20 percent. What is the annual standard deviation of the stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Explanation
0.0071666667 0.78%
0.3186973486
nnual standard deviation =  monthly standard deviation/ (T)^(1/2)
Annual standard deviation = 9.40%/(1/12)^(1/2)
Annual standard deviation = 32.56%

Sheet3

Problem 13-3
Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset:
  Portfolio RP σP βP  
  X 15 % 31 % 1.85  
  Y 14 26 1.25  
  Z 8.3 16 .85  
  Market 11.2 21 1.00  
  Risk-free 4.8 0 0  
What is the Sharpe ratio, Treynor ratio, and Jensen’s alpha for each portfolio? (Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your Sharpe ratio answers and Treynor ratio answers to 5 decimal places and Jensen's alpha answers to 2 decimal places. Omit the "%" sign in your response.)
Portfolio Sharpe Ratio Treynor Ratio Jensen's Alpha
X        %  
Y        %  
Z        %  
Market        %  

Sheet4

Problem 13-4
Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset:
  Portfolio RP σP βP  
  X 11% 33% 1.45  
  Y 10 28 1.20  
  Z 8.1 18 .75  
  Market 10.4 23 1.00  
  Risk-free 5.2 0 .00  
Assume that the tracking error of Portfolio X is 9.10 percent. What is the information ratio for Portfolio X?(Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 4 decimal places.)
  Information ratio (Answer)   

Sheet5

Problem 13-5
Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset:
  Portfolio RP σP βP  
  X 14% 20% 1.80  
  Y 13 15 1.30  
  Z 9.2 5 .85  
  Market 11.1 10 1.00  
  Risk-free 6.6 0 0  
Assume that the correlation of returns on Portfolio Y to returns on the market is .80. What is the percentage of Portfolio Y’s return that is driven by the market? (Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
  Y’s return explained by market  % 

Sheet6

Problem 13-6
The Layton Growth Fund has an alpha of 2.1 percent. You have determined that Layton’s information ratio is .50. What must Layton’s tracking error be relative to its benchmark? (Enter your answer as a percent rounded to 1 decimal place. Omit the "%" sign in your response.) The Layton Growth Fund has an alpha of 1.7 percent. You have determined that Layton’s information ratio is .20. What must Layton’s tracking error be relative to its benchmark? (Enter your answer as a percent rounded to 1 decimal place. Omit the "%" sign in your response.)
  Tracking error  %  
Explanation:
TE = 2.1% / .50 = 4.2%
0.042 0.085

Sheet7

Problem 13-13
1 A stock has an annual return of 11 percent and a standard deviation of 44 percent. What is the smallest expected loss over the next year with a probability of 1 percent? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
  Smallest expected loss   %  

Sheet8

Problem 13-14
a. A stock has an annual return of 15 percent and a standard deviation of 58 percent. What is the smallest expected gain over the next year with a probability of 2.5 percent? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
  Smallest expected gain  %  
b. Does this number make sense?
Yes
No

Sheet9

Problem 13-19
Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .97.
Year Fund Market Risk-Free
2008 –23.00% –43.5% 3%
2009 25.1 21.4 5
2010 14.3 15.1 2
2011 6.8 8.8 6
2012 –2.34 –5.2 2
What are the Sharpe and Treynor ratios for the fund? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
     
  Sharpe ratio   
  Treynor ratio   

Sheet10

Problem 13-20
Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .87.
Year Fund Market Risk-Free
2008 –18.20% –35.5% 2%
2009 25.1 20.6 5
2010 13.5 12.7 2
2011 6.8 8.4 6
2012 –1.86 –4.2 3
Calculate Jensen’s alpha for the fund, as well as its information ratio. (Do not round intermediate calculations. Round your Jensen’s alpha answer to 2 decimal places and Information ratio answer to 4 decimal places. Omit the "%" sign in your response.)
     
  Jensen’s alpha  %  
  Information ratio       

#13

Problem 17-3
You are given the following information for Smashville, Inc.
  Cost of goods sold: $ 209,000
  Investment income: $ 2,100
  Net sales: $ 392,000
  Operating expense: $ 90,000
  Interest expense: $ 7,400
  Dividends: $ 14,000
  Tax rate: 35 %
  Current liabilities: $ 22,000  
  Cash: $ 21,000  
  Long-term debt: $ 27,000  
  Other assets: $ 37,000  
  Fixed assets: $ 128,000  
  Other liabilities: $ 5,000  
  Investments: $ 41,000  
  Operating assets: $ 35,000  
Calculate the gross margin, the operating margin, return on assets, and return on equity. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
  
  Gross margin  %  
  Operating margin  %  
  Return on assets  %  
  Return on equity  %  

#14

Problem 17-4
You are given the following information for Smashville, Inc.
  
  Cost of goods sold: $ 119,000
  Investment income: $ 2,300
  Net sales: $ 232,000
  Operating expense: $ 40,000
  Interest expense: $ 7,400
  Dividends: $ 11,000
  Tax rate: 40 %
  Current liabilities: $ 18,000  
  Cash: $ 21,000  
  Long-term debt: $ 25,000  
  Other assets: $ 39,000  
  Fixed assets: $ 126,000  
  Other liabilities: $ 5,000  
  Investments: $ 43,000  
  Operating assets: $ 45,000  
During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $15,000. Calculate the book value per share, earnings per share, and cash flow per share. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)
  
  Book value per share $   
  Earnings per share $   
  Cash flow per share $   

#15

Problem 17-5
You are given the following information for Smashville, Inc.
  
  Cost of goods sold: $ 184,000
  Investment income: $ 1,600
  Net sales: $ 387,000
  Operating expense: $ 88,000
  Interest expense: $ 7,400
  Dividends: $ 6,000
  Tax rate: 30 %
  Current liabilities: $ 12,000  
  Cash: $ 21,000  
  Long-term debt: $ 32,000  
  Other assets: $ 40,000  
  Fixed assets: $ 125,000  
  Other liabilities: $ 5,000  
  Investments: $ 36,000  
  Operating assets: $ 64,000  
During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $19,000. At the end of the year, Smashville stock sold for $42 per share. Calculate the price-book ratio, price-earnings ratio, and the price-cash flow ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
  
  Price-book ratio   
  Price-earnings ratio   
  Price-cash flow ratio   

#16

Problem 17-6
The most recent financial statements for Bradley, Inc., are shown here (assuming no income taxes):
  
Income Statement
  Sales $ 5,600
  Costs -4,200
  Net income $ 1,400
Balance Sheet
  Assets $ 16,420 Debt $ 8,500  
Equity 7,920  
  Total $ 16,420 Total $ 16,420  
  
Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $6,552. What is the external financing needed? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole dollar. Omit the "$" sign in your response.)
  
  EFN $ 

#17

Problem 17-7 Problem 17-7
Weston Corporation had earnings per share of $1.64, depreciation expense of $310,000, and 140,000 shares outstanding. What was the operating cash flow per share? If the share price was $43, what was the price-cash flow ratio? (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.) Weston Corporation had earnings per share of $1.96, depreciation expense of $484,500, and 190,000 shares outstanding. What was the operating cash flow per share? If the share price was $73, what was the price-cash flow ratio? (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)
  Operating cash flow per share $   
  Price-cash flow   
Explanation:
Depreciation per share = $310,000 / 140,000 = $2.21 2.55
Operating cash flow per share = $1.64 + 2.21 = $3.85 4.51
Price-cash flow = $43 / $3.85 = 11.16 16.19

#18

Problem 17-8 Problem 17-8
Alphonse Inc. has a return on equity of 12 percent, 28,000 shares of stock outstanding, and a net income of $98,000. What are earnings per share? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Alphonse Inc. has a return on equity of 16 percent, 30,000 shares of stock outstanding, and a net income of $101,500. What are earnings per share? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
  
  EPS $      EPS $   
Explanation:
EPS = $98,000 / 28,000 = $3.50 3.3833333333

#19

Problem 17-9 Problem 17-9
Lemon Co. has net income of $520,000 and 75,000 shares of stock. If the company pays a dividend of $1.28 per share, what are the additions to retained earnings? (Do not round intermediate calculations. Round your answer to the nearest whole dollar. Omit the "$" sign in your response.) Lemon Co. has net income of $620,000 and 70,000 shares of stock. If the company pays a dividend of $2.08 per share, what are the additions to retained earnings? (Do not round intermediate calculations. Round your answer to the nearest whole dollar. Omit the "$" sign in your response.)
  Additions to retained earnings $  
Explanation:
Total dividends = $1.28 × 75,000 = $96,000 145600
Addition to retained earnings = $520,000 – 96,000 = $424,000 474400

#20

Problem 17-10
  Net income: $ 224  
  Depreciation: $ 49  
  Issuance of new stock: $ 7  
  Repurchase of debt: $ 18  
  Sale of property: $ 18  
  Purchase of equipment: $ 80  
  Dividend payments: $ 5  
  Interest payments: $ 29  
Given the above information for Hetrich, Inc., calculate the operating cash flow, investment cash flow, financing cash flow, and net cash flow. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole dollar. Omit the "$" sign in your response.)
    
  Operating cash flow $   
  Investment cash flow $   
  Financing cash flow $   
  Net cash increase $   

#21

Problem 17-11
The most recent financial statements for Martin, Inc., are shown here:
   
Income Statement
  Sales $ 24,550 
  Costs -14,730
  Taxable income $ 9,820 
  Taxes (35%) -3,437
Net income $ 6,383 
  
Balance Sheet
  Assets $ 93,290 Debt $ 33,000  
Equity 60,290  
Total $ 93,290 Total $93,290  
Assets and costs are proportional to sales. Debt and equity are not. A dividend of $955 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $29,951. What is the external financing needed? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
  
  EFN $   

Sheet22

Problem 17-13
Amounts are in thousands of dollars (except number of shares and price per share):
Kiwi Fruit Company Balance Sheet Kiwi Fruit Company Income Statement
  Cash and equivalents $ 570     Net sales $ 7,800
  Operating assets 650     Cost of goods sold -5900
  Property, plant, and equipment 2,700  
  Other assets 110  
  Gross profit $ 1,900
  Total assets $ 4,030     Operating expense -990
  Current liabilities $ 920  
  Long-term debt 1,280     Operating income $ 910
  Other liabilities 120     Other income 105
  Net interest expense -200
  Total liabilities $ 2,320  
  Pretax income $ 815
  Paid in capital $ 340     Income tax -285
  Retained earnings 1,370  
  Total equity $ 1,710     Net income $ 530
  Total liabilities and equity $ 4,030  
  Earnings per share $ 2
  Shares outstanding 265,000
  Recent price $ 34.5
Explanation: Calculations
Return on assets (ROA) is $530 / $4,030 = 13.15% Net income divided by total liab/equity
Return on equity (ROE) is $530 / $1,710 = 30.99% Net income divided by total equity

#25

Thorpe Mfg., Inc., is currently operating at only 75 percent of fixed asset capacity. Current sales are $480,000. How fast can sales grow before any new fixed assets are needed? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) Thorpe Mfg., Inc., is currently operating at only 91 percent of fixed asset capacity. Current sales are $560,000. How fast can sales grow before any new fixed assets are needed? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
  Maximum sales growth  %  
Explanation:
Full capacity sales = $480,000 / .75 615385
Full capacity sales = $640,000
The maximum sales growth is the full capacity sales divided by the current sales, so:
9.89%
Maximum sales growth = ($640,000 / $480,000) – 1
Maximum sales growth = .3333, or 33.33%

Sheet24

Problem 17-14
Amounts are in thousands of dollars (except number of shares and price per share):
  
Kiwi Fruit Company Balance Sheet
  Cash and equivalents $ 360  
  Operating assets 750  
  Property, plant, and equipment 3,000  
  Other assets 160  
  Total assets $ 4,270  
  Current liabilities $ 980  
  Long-term debt 1,260  
  Other liabilities 170  
  Total liabilities $ 2,410  
  Paid in capital $ 390  
  Retained earnings 1,470  
  Total equity $ 1,860  
  Total liabilities and equity $ 4,270  
    
Kiwi Fruit Company Income Statement
  Net sales $ 8,000.00
  Cost of goods sold (6,500.00)
  Gross profit $ 1,500.00
  Operating expense (500.00)
  
  Operating income $ 1,000.00
  Other income 155.00
  Net interest expense (200.00)
  
  Pretax income $ 955.00
  Income tax (245.00)
  Net income $ 710.00
  Earnings per share $ 2.50
  Shares outstanding 284,000.00
  Recent price $ 26.00
   
Kiwi Fruit Company Cash Flow Statement
  Net income $ 710.00
  Depreciation and amortization 300.00
  Increase in operating assets (60.00)
  Decrease in current liabilities (114.00)
  Operating cash flow $ 836.00
  Net (purchase) sale of property $ 195.00
  Increase in other assets (72.00)
  
  Investing cash flow $ 123.00
  Net (redemption) issuance of LTD $ (170.00)
  Dividends paid (180.00)
  Financing cash flow $ (350.00)
  Net cash increase $ 609.00
Calculate the price-book, price-earnings, and price-cash flow ratios for Kiwi Fruit. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 
    
  Price-book ratio   
  Price-earnings ratio   
  Price-cash flow ratio   

Sheet26

455.58 695
56 60
40 40 txt bk
40 40 7
40 40 8
68 125
699.58 1000 0.69958

4.2

4.2

3.85 ± 1%

3.85 ± 1%

11.16 ± 1%

11.16 ± 1%

3.50 ± 1%

3.50 ± 1%

424,000 ± .1%

424,000 ± .1%

33.33 ± 1%

33.33 ± 1%