Questions from Corporate Finance

Q: Using your estimates from Problem 5, calculate the volatility (standard

Using your estimates from Problem 5, calculate the volatility (standard deviation) of a portfolio that is 70% invested in stock A and 30% invested in stock B. Data from Problem 5: Using the data in...

Q: Using the data from Table 11.3, what is the

Using the data from Table 11.3, what is the covariance between the stocks of Alaska Air and Southwest Airlines? Table 11.3:

Q: Which organizational forms give their owners limited liability?

Which organizational forms give their owners limited liability?

Q: At the end of 2015, Apple had cash and short-

At the end of 2015, Apple had cash and short-term investments of $41.60 billion, accounts receivable of $35.89 billion, current assets of $89.38 billion, and current liabilities of $80.61 billion. a....

Q: Suppose two stocks have a correlation of 1. If the first

Suppose two stocks have a correlation of 1. If the first stock has an above average return this year, what is the probability that the second stock will have an above average return?

Q: Suppose Pepsico’s stock has a beta of 0.57. If

Suppose Pepsico’s stock has a beta of 0.57. If the risk-free rate is 3% and the expected return of the market portfolio is 8%, what is Pepsico’s equity cost of capital?

Q: You need to estimate the equity cost of capital for XYZ Corp

You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: a. What was XYZ’s average historical return? b. Compute...

Q: Go to Chapter Resources on and use the data in the spreadsheet

Go to Chapter Resources on and use the data in the spreadsheet provided to estimate the beta of Nike and Dell stock based on their monthly returns from 2011–2015.

Q: Using the same data as in Problem 11, estimate the alpha

Using the same data as in Problem 11, estimate the alpha of Nike and Dell stock, expressed as % per month. Data from Problem 11: Go to Chapter Resources on and use the data in the spreadsheet provid...

Q: Using the same data as in Problem 11, estimate the 95

Using the same data as in Problem 11, estimate the 95% confidence interval for the alpha and beta of Nike and Dell stock using Excel’s regression tool (from the data analysis menu) or the linest() fun...