As of June the US risk-free rate is approximately 0.159%. Assume for the moment that market risk is 7% due to the pandemic. Answer the following questions: A. What is the required return for the company you used for the financial analysis project? Show your calculations. B. The risk-free rate and market risk above define a Security Market Line (SML). If the risk-free rate were to rico to 90% poxt mon+h bow wOuld that
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- EXTRA RISK PROBLEMS Sanck A Sk Expected Retun Standand Deviatim 12 75 16 Comelation cnefficieit wth the Market Comelation coeficient with Stock B Risk fre e 2% Expected etu on the Market 12 Standund deviation of the Market E 1. What is the expected retum on a portfolio comprised of S60o00 of Suck A and S4000 of Sock B7 2. Whe is the Stnderd deviation of this portidio? 3. Does it make sense to combine these two in this way? Pease explain why. 4 What is the ocoefficient of variation for Stock A? What is the coefficient of variation for Stock B?A firm is considering purchasing equipment to manufacture a new product. The equipment will cost $3M, and expected net cash inflowsare $0.35M indefinitely. If market demand for theproduct is low, then over the next five years thefirm will have the option of discarding the equipment on a secondary market for $2.2M. Assume thatMARR = 12%, s = 50%, and r = 6%. What isthe value of this investment opportunity for the firm?Marvel Woodorat makes furiture. Marvats exoected sales are 22.000 bookcases for the quarter. The company begins the quaner with inventory of 3,000 bookcases and worts to heve ensugh finished bookceses en hand et the end of the queter to provide for 15% ef the next querter's erpected saies of 27.000 bookcses gnoring eny beginning inventory. ir so board feat are required for each bookcase and the waod costs $2 per board foot, how much wil Marval pay for the bookcases t neads produce during the querter Mite Chee sa1os.000 sa900.000 S405000 SEO0000
- 9:48 O O 90% iwe-nnoq-seu ► PROBLEM SOLVING LA bil for a motorbort indicates a cost of P2, s00 dur in 100 deys. but promites a % tistounti Pimbursed within 30 days What is the highest umple interest rate at which the buyer can berrow money in orter to henete trom the tiscnunt? 2. The salling prica ot a TV sat it doutlu that at its net cant, It the TV sut li solit te a ustomer at a profit of 25% af the net cot, how much discount was gven to the customer? 3. A salestady's morthly come at Jessie's Department Stare s partly fied and partiaty variabke, dependng on the value uf her sales for the month When the manthly value uf her salen b P10c00.00, her montiy salary PSOL.cO. Her moothiy income increases to FLO00,00 when hur mnnthiy vales reach PIL00U D0 What must the value of her monthly sales be in order for her monthly salary to reath 4, You re buyng new televnien, From pant experience you estimate future repair cont es S00 during the fiest year, P1800 during second year, P2700 during the…sc. te Con oa S Payn Comp able for discrete con cto . C Enetor 76 Fiid A Given P (Round to the neare T Find AIP acceptable. O8929 0.7972 07118 0 6355 0.5674 0 5066 0.4523 0,4039 0 3606 10000 21200 O 8929 1.1200 0.5917 1 1.1200 1,0000 0.4717 16901 2 4018 1.2544 0 2963 0.4163 B3744 47798 1.4049 1.5735 1.7623 1.9738 3 30373 0.2092 0.3292 3.6048 4.1114 4.5638 0.2774 6.3528 8 1152 10.0390 12.2997 14 7757 0.1574 0.1232 0.0991 0.2432 6. 0.2191 7 2.2107 0.0813 0.2013 4.9676 5.3282 5.6502 8 2.4760 0.1877 0.1770 0.0677 6. 2.7731 0.3220 17.5487 0.0570 10 3.1058 Print DoneA businessman invest Ρhр 10,000 in equiрment to рroduce a new biscuit рroduct. Each рack o ofthe рroduct costs Ρhр 0.65 to рroduce and is sold for Ρhр 1.20. How many рacks must be sold before the business breaks even? Solve the рroblem by formula and by graрh.
- start_frame auto.d21?ou=1492871&isprv=&drc%=0&qi=/ Casey Rosenberg: Attempt 1 Graph (a) Graph (b) NCO Demand Supply NET CAPITAL OUTFLOW QUANTITY OF LOANABLE FUNDS Graph (c) Supply MacBook Air DII F12 F10 F11 F9 80 F7 F8 F6 F5 F4 F3 23 24 7 8. 4 Y U P D G J. K AL EXCHANGE RATE REAL INTEREST RATEMarvel Woodcraft makes fumiture. Marvars expected sales are 21000 bookcases for the quarter. The company begins the quarter with invertory of 3,000 bookcases and warts te heve enough finished beokceses en hand et the end of the auener to provide for 15N of the nest querter's enoected seies of 27000 bookcases. gnoring any begirving iventory r so board feet are required for anch bookcase and the wood costs $2 per board foot, how much will Marvel pay for the bookcases a neads produce during the querter Mte Choe SA o s2900.000 S405.00033 TB MC Qu. 12-82 A stock had annual returns of... A stock had annual returns of 5.5 percent, -12 percent, and 15.5 percent for the past thr of returns for this stock? 56.65% 6.94% 1.94%
- The preferred stock of North Coast Shoreline pays an annual dividend of $1.70 and sells for $20.24 a share. What is the rate of return on this security? A. 5.95 percent B.7.08 percent C.8.40 percent DD. 11.90 percent DE 14.17 percent 15Google Password Required G Enter your password for "210352" in Internet Accounts. Rapidldenti x CClever | Tea X Content Ch. 14 Read x D Nathan Mej x S Savvas Real iin. A southtexascollege.blackboard.com/ultra/courses/_297686_1/cl/outline?legacyUrl=%252Fwebapps%252Fblackboard%25.r 10 YLQ1 Y1Q Y103 Y1Q4 Y2Q1 Y202 ¥2Q4 Y3Q1 Y3Q2 2) Part A: Why must double counting be avoided when measuring GDP? Provide an elaborate answer with at least one example. Part B: Aggregate Demand (AD) Curve shows the relationship between the economy's price level and real GDP demanded. In other words, real GDP demanded by different groups of buyers, i.e., Consumers (C), Businesses (1), Government (G), and Net Amount by Foreigners (Export - Import), at different price levels give us points on a graph, which are connected to form a curve called AD curve. Review the textbook chapter, and conduct internet research to discuss determinants of AD or factors that shift AD curve. Part C: Following graph shows business…You work for a pharmaceutical company that has developed a new vaccine. The patenton the vaccine will last 15 years. You expect that the drug’s profits will be $2 million in itsfirst year and that the profit will grow at a rate of 5% per year for the next 15 years. Oncethe patent expires, other pharmaceutical companies will be able to produce the same drugand competition will likely reduce growth to 1% per year. a. What is the present value of the new drug if the cost of capital is 8%? b. What is the drug’s present value if competition causes the company to havenegative growth of -5% (i.e., minus 5%) after the first 15 years?