Questions from General Investment

Q: Sisters Corp. expects to earn $6 per share next year

Sisters Corp. expects to earn $6 per share next year. The firm’s ROE is 15% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%, what is the present value of its growth oppo...

Q: After much research on the developing economy and capital markets of the

After much research on the developing economy and capital markets of the country of Otunia, your firm, GAC, has decided to include an investment in the Otunia stock market in its Emerging Markets Comm...

Q: Angus Walker, CFA, is reviewing the defined benefit pension plan

Angus Walker, CFA, is reviewing the defined benefit pension plan of Acme Industries. Based in London, Acme has operations in North America, Japan, and several European countries. Next month, the retir...

Q: Sam Short, CFA, has recently joined the investment management firm

Sam Short, CFA, has recently joined the investment management firm of Green, Spence, and Smith (GSS). For several years, GSS has worked for a broad array of clients, including employee benefit plans,...

Q: Jarvis University (JU) is a private, multiprogram U.

Jarvis University (JU) is a private, multiprogram U.S. university with a $2 billion endowment fund as of fiscal year-end May 31, 2025. With little government support, JU is heavily dependent on its en...

Q: Susan Fairfax is president of Reston Industries, a U.S

Susan Fairfax is president of Reston Industries, a U.S.-based company whose sales are entirely domestic and whose shares are listed on the New York Stock Exchange. The following are additional facts c...

Q: John Franklin is a recent widower with some experience in investing for

John Franklin is a recent widower with some experience in investing for his own account. Following his wife’s recent death and settlement of the estate, Mr. Franklin owns a controlling interest in a s...

Q: Christopher Maclin, aged 40, is a supervisor at Barnett Co

Christopher Maclin, aged 40, is a supervisor at Barnett Co. and earns an annual salary of £80,000 before taxes. Louise Maclin, aged 38, stays home to care for their newborn twins. She rec...

Q: Louise and Christopher Maclin (see Problem 8) have purchased their

Louise and Christopher Maclin (see Problem 8) have purchased their house and made the donation to the local charity. Now that an investment policy statement has been prepared for the Maclins, Grant We...

Q: A newly issued bond paying a semiannual coupon has the following characteristics

A newly issued bond paying a semiannual coupon has the following characteristics: a. Calculate modified duration using the information above. b. Explain why modified duration is a better measure than...