Questions from Corporate Finance

Q: You are analyzing a stock that has a beta of 1.

You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and you estimate the market risk premium to be 6%. If you expect the stock to have a return of 11% over the next year, should...

Q: The following table contains prices and dividends for a stock. All

The following table contains prices and dividends for a stock. All prices are after the dividend has been paid. If you bought the stock on January 1 and sold it on December 31, what is your realized r...

Q: You buy 100 shares of Tidepool Co. for $40 each

You buy 100 shares of Tidepool Co. for $40 each and 200 shares of Madfish, Inc., for $15 each. What are the weights in your portfolio?

Q: Fremont Enterprises has an expected return of 15% and Laurelhurst News

Fremont Enterprises has an expected return of 15% and Laurelhurst News has an expected return of 20%. If you put 70% of your portfolio in Laurelhurst and 30% in Fremont, what is the expected return of...

Q: Explain the difference between the arithmetic average return you calculated in Problem

Explain the difference between the arithmetic average return you calculated in Problem 10a and the geometric average return you calculated in Problem 10b. Are both numbers useful? If so, explain why....

Q: You are considering how to invest part of your retirement savings.

You are considering how to invest part of your retirement savings. You have decided to put $200,000 into three stocks: 50% of the money in GoldFinger (currently $25/share), 25% of the money in Moosehe...

Q: You have $70,000. You put 20% of

You have $70,000. You put 20% of your money in a stock with an expected return of 12%, $30,000 in a stock with an expected return of 15%, and the rest in a stock with an expected return of 20%. What i...

Q: Bill Clinton reportedly was paid $10 million to write his book

Bill Clinton reportedly was paid $10 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popul...

Q: Stocks A and B have the following returns (see My Finance

Stocks A and B have the following returns (see My Finance Lab for the data in Excel format): a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of t...

Q: Using the data in the following table, estimate the average return

Using the data in the following table, estimate the average return and volatility for each stock.