LinkedIn suffered a large drop in share value following an unexpectedly weak forecast of their future earnings. Why would this surprise cause investors to value LinkedIn lower?
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LinkedIn suffered a large drop in share value following an unexpectedly weak
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- Selected Stocks from the Dow Jones Industrial Average for a Day in 2015 52-week 52-week high Net % YTD Name Symbol Open High Low Close chg Chg Volume low Div Yield PE %chg Apple APPL 113.84 115.01 113.61 | 115.01 1.73 1.51 41654100 134.54 92. 2.08 2.14 10.05 8.48 Вoeing ВА 141.13 146.45 141.05 | 145.41 5.09 3.5 6976300 158.83 115.02 4.36 3.63 15.8 0.56 International Business IBM 140.42 143.72 140.30 142.75 3.14 2.2 5583200 176.3 118. 5.20 4.17 9.16 3.59 Machines Johnson & JNJ 97.134 99.08 96.42 98.802 1.89 | 1.91 9887900 105.49 81.79 3.00 2.87 18.88 -3.97 Johnson General GE 28.74 29.52 28.70 29.36 0.72 2.47 81476400 31.49 19.37 0.92 3.16 16.97 -6.1 Electric Procter & PG 73.22 74.96 72.97 74.20 1.25 1.68 14080900 86.78 65.02 2.65 3.25 27.17 -6.09 Gamble1/1/-1 Completed 1 out of 3 The table contains information about Twitter's stock. When the stock market opened today, at what price was a share of Twitter stock traded? Current price $41.35 $42.50 Open High Low Prev close $42.44 52 week high $45.86 52 week low $26.19 $31.96b 13.70 Mkt cap P/E Ratio $42.67 $40.61 $45.86 $42.50 $41.35 $40.61Q7 The following table shows your stock positions at the beginning of the year, the dividends that each stock paid during the year, and the stock prices at the end of the year. Company Shares Beginning of Year Price Dividend Per Share End of Year Price US Bank 300 $ 43.50 $ 2.06 $ 43.43 PepsiCo 200 59.08 1.16 62.55 JDS Uniphase 500 18.88 16.66 Duke Energy 250 27.45 1.26 33.21 What is your portfolio dollar return and percentage return? (Round your answers to 2 decimal places.) DOLLOR RETURNED PERCENTAGE RETURNED. %
- LG 5 P9-10 Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for $57.50. The firm expects to pay a $3.40 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table. Year 2015 2014 2013 2012 2011 Dividend $3.10 2.92 2.60 2.30 2.12 After underpricing and flotation costs, the firm expects to net $52 per share on a new issue. a. Determine the growth rate of dividends from 2011 to 2015. b. Determine the net proceeds, N, that the firm will actually receive. c. Using the constant-growth valuation model, determine the cost of retained earnings, r d. Using the constant-growth valuation model, determine the cost of new common stock, TQuestions The table shows the value of the FTSE 100 share index over 6-month periods for 2 years. Value (£) 7,147 7,455 7,692 7,668 7,154 Month January 2017 July 2017 January 2018 July 2018 January 2019 If the value of shares held in the FTSE 100 was £2,450 in July 2017, what would it be in July 2018? O O 0 £2 O £2,553 O £2,560 £2,478 £2,505 £2,520 Next »Q21 The NASDAQ stock market bubble peaked at 4,816 in 2000. Two and a half years later it had fallen to 1,000. What was the percentage decline? (Negative answer should be indicated with a minus sign. Round your answer to 2 decimal places.) MARKET DECLINE. %
- Risk A1 Q5-1 Question 5. Volatility and Option Hedging Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a dividend yield of 4% per year. The following table contains the monthly stock prices for IBM shares during the last 12 months. Month (2015) IBM Share Price January 148.46 February 157.92 March 156.51 April 167.04 May 166.69 June 159.82 July 159.16 August 146.52 September 143.62 October 138.78 November 139.42 December 137.62 A call option with a March 18, 2016 expiration date and an exercise price of $130 is currently trading at $6.50. Each option entitles the holder to purchase 100 IBM shares. The risk-free rate is 0.58%, compounded continuously. Shares and options can only be bought and sold in whole numbers. Note that 2016 is a leap year. Compute the historical volatility in terms of annualized standard deviation on the IBM shares, using…Risk A1 Q5-5 Question 5. Volatility and Option Hedging Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a dividend yield of 4% per year. The following table contains the monthly stock prices for IBM shares during the last 12 months. Month (2015) IBM Share Price January 148.46 February 157.92 March 156.51 April 167.04 May 166.69 June 159.82 July 159.16 August 146.52 September 143.62 October 138.78 November 139.42 December 137.62 A call option with a March 18, 2016 expiration date and an exercise price of $130 is currently trading at $6.50. Each option entitles the holder to purchase 100 IBM shares. The risk-free rate is 0.58%, compounded continuously. Shares and options can only be bought and sold in whole numbers. Note that 2016 is a leap year. 5. There is another call…Risk A1 Q5-3 Question 5. Volatility and Option Hedging Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a dividend yield of 4% per year. The following table contains the monthly stock prices for IBM shares during the last 12 months. Month (2015) IBM Share Price January 148.46 February 157.92 March 156.51 April 167.04 May 166.69 June 159.82 July 159.16 August 146.52 September 143.62 October 138.78 November 139.42 December 137.62 A call option with a March 18, 2016 expiration date and an exercise price of $130 is currently trading at $6.50. Each option entitles the holder to purchase 100 IBM shares. The risk-free rate is 0.58%, compounded continuously. Shares and options can only be bought and sold in whole numbers. Note that 2016 is a leap year. 3. Construct a delta-hedge position on January 4, 2016 involving the sale of 1,000 calls. Then…
- Risk A1 Q5-6 Question 5. Volatility and Option Hedging Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a dividend yield of 4% per year. The following table contains the monthly stock prices for IBM shares during the last 12 months. Month (2015) IBM Share Price January 148.46 February 157.92 March 156.51 April 167.04 May 166.69 June 159.82 July 159.16 August 146.52 September 143.62 October 138.78 November 139.42 December 137.62 A call option with a March 18, 2016 expiration date and an exercise price of $130 is currently trading at $6.50. Each option entitles the holder to purchase 100 IBM shares. The risk-free rate is 0.58%, compounded continuously. Shares and options can only be bought and sold in whole numbers. Note that 2016 is a leap year. 6. Obtain the value of this…Risk A1 Q5-4 Question 5. Volatility and Option Hedging Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a dividend yield of 4% per year. The following table contains the monthly stock prices for IBM shares during the last 12 months. Month (2015) IBM Share Price January 148.46 February 157.92 March 156.51 April 167.04 May 166.69 June 159.82 July 159.16 August 146.52 September 143.62 October 138.78 November 139.42 December 137.62 A call option with a March 18, 2016 expiration date and an exercise price of $130 is currently trading at $6.50. Each option entitles the holder to purchase 100 IBM shares. The risk-free rate is 0.58%, compounded continuously. Shares and options can only be bought and sold in whole numbers. Note that 2016 is a leap year. 4. Obtain the value of this delta-hedge portfolio after it has been rebalanced. Compare this value to…Risk A1 Q5-2 Question 5. Volatility and Option Hedging Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a dividend yield of 4% per year. The following table contains the monthly stock prices for IBM shares during the last 12 months. Month (2015) IBM Share Price January 148.46 February 157.92 March 156.51 April 167.04 May 166.69 June 159.82 July 159.16 August 146.52 September 143.62 October 138.78 November 139.42 December 137.62 A call option with a March 18, 2016 expiration date and an exercise price of $130 is currently trading at $6.50. Each option entitles the holder to purchase 100 IBM shares. The risk-free rate is 0.58%, compounded continuously. Shares and options can only be bought and sold in whole numbers. Note that 2016 is a leap year. 2. Based on the market price of $6.50, derive the implied volatility on the IBM shares. Obtain your…