Questions from Corporate Finance

Q: Consider the following information about three stocks:

Consider the following information about three stocks:a. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The standard...

Q: Suppose the returns on large-company stocks are normally distributed. Based

Suppose the returns on large-company stocks are normally distributed. Based on the historical record, use the cumulative normal probability table (rounded to the nearest table value) in the appendix o...

Q: You want to create a portfolio equally as risky as

You want to create a portfolio equally as risky as the market, and you have $1,000,000 to invest. Given this information, fi ll in the rest of the following table:,,,

Q: Suppose the returns on long-term corporate bonds and T-bills are

Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Based on the historical record, use the cumulative normal probability table (rounded to the nearest table value)...

Q: Filer Manufacturing has 11 million shares of common stock outstanding.

Filer Manufacturing has 11 million shares of common stock outstanding. The current share price is $68, and the book value per share is $6. Filer Manufacturing also has two bond issues outstanding. The...

Q: In Problem 12, suppose the most recent dividend was $4.10

In Problem 12, suppose the most recent dividend was $4.10 and the dividend growth rate is 6 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding...

Q: Jungle, Inc., has a target debtequity ratio of 1.05. Its

Jungle, Inc., has a target debtequity ratio of 1.05. Its WACC is 9.4 percent, and the tax rate is 35 percent.a. If Jungle’s cost of equity is 14 percent, what is its pretax cost of debt?b. If instead...

Q: Given the following information for even flow Power Co., find

Given the following information for even flow Power Co., find the WACC. Assume the company’s tax rate is 35 percent.Debt: 8,000 6.5 percent coupon bonds outstanding, $1,000 par value, 20 years to matu...

Q: The Up and Coming Corporation’s common stock has a beta

The Up and Coming Corporation’s common stock has a beta of 1.05. If the risk-free rate is 5.3 percent and the expected return on the market is 12 percent, what is the company’s cost of equity capital?

Q: Stock in Country Road Industries has a beta of .85.

Stock in Country Road Industries has a beta of .85. The market risk premium is 8 percent, and T-bills are currently yielding 5 percent. The company’s most recent dividend was $1.60 per share, and divi...