Damon convinced his aunt to lend him $2,000 to purchase a plasma digital TV. She has agreed to charge only 6 % simple interest, and he has agreed to repay the loan at the end of one year. How much…
a) Borrow $10,200 from the First National Bank at a fixed rate of 12% per annum, simple interest. The loan would be repaid in equal monthly installments over a 3-yar (36 months) period. b) Obtain a $10,200 installment loan requiring…
At the end of 2012, SeaScape Industries has 100,000 shares of common stock outstanding and had earnings available to the common shareholder of $200,000. Tara Company, at the end of 2012 had 12,000 shares of common stock outstanding and had…
1.The standard deviation of stock returns for Stock A is 30%. The standard deviation of the market return is 20% and the correlation between Stock A and the market is 0.75. a.Calculate Stock A’s beta.b.In a bull market with rapidly…
Please help with quantitatively evaluating the following data by calculating the expected impact, the standard deviation, and the coefficient of variation for each risk. Additionally, what do these statistics tell you about the possible risks? For commodity price risk, there…
H. J. Corp. common stock paid $2.50 in dividends last year (DO). Dividends are expected to grow at a 12-percent annual rate forever. If H. J.’s current market price is $40.00, what is the stock’s expected rate of return (nearest…
Suppose that Kate and Anne enter into a pooling arrangement. Assume that both women have the following loss-distributions and that losses are independent.$50,000 with probability 0.005$20,000 with probability 0.01Loss = $10,000 with probability 0.02$ 0 with probability 0.965a.Write out the…
You expect a share of stock to pay dividends of $1.10, $1.35, and $1.60 in each of the next 3 years. You believe the stock will sell for $12 at the end of the third year. a) What is the…
Consider a person with the following utility function over wealth: u(w) = ew, where e is the exponential function (approximately equal to 2.7183) and w = wealth in hundreds of thousands of dollars. Suppose that this person has a 40% chance…
Fama’s Llamas has a WACC of 9.80 percent. The company’s cost of equity is 12.2 percent, and its cost of debt is 7.4 percent. The tax rate is 40 percent. What is Fama’s target debt-equity ratio?
