For essay questions, please limit your responses to no more than three to four paragraphs. 1. The Wall Street Journal reported that the yield on common stocks is about 2 percent, while a study at The University of Chicago contends the annual rate of stocks since 1926 has averaged 12 percent. Reconcile these statements. 2. You purchased five shares of College Park metals at $55 per share on January 1, 2011. The shares now trade at $60 and you intend to sell the stocks on November 30, 2011. Compute holding period return and holding period yield. Also calculate the same if you were to sell these stocks on December 31, 2011 and expected the shares to still be worth $60 per share. 3. What is the marginal tax rate of a couple earning $50,000 per year? 4. Using economic statistical websites, compare the most recent economic performance of the United States and the United Kingdom. Compare specifically: GDP, unemployment, and inflation. Discuss your findings. 5. You own a portfolio consisting of 20 shares each of Apple (AAPL), Microsoft (MSFT) and Ford Motor Company (F). You purchased these shares on January 1, 2010. Use Yahoo! Finance or Google Finance to look up historical prices. a. Compute the value of your portfolio on the date of purchase in dollars b. Calculate the weights of each stock by dollar value. c. Compute the holding period return for this portfolio on October 1, 2011. d. Compute the holding period return on December 31, 2010. e. What do you think of this portfolio? How would you adjust it? 1. Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $52.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 45% debt and 55% common equity. What is the company?s WACC if all the equity used is from retained earnings? 2. Malholtra Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's MIRR can be less than the WACC (and even negative), in which case it will be rejected. WACC: 10.00% Year 0 1 2 3 4 Cash flows -$850 $300 $320 $340 $360 3. Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by choosing the project with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, i.e., what's the chosen NPV versus the maximum possible NPV? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained or lost. WACC: 7.50% Year 0 1 2 3 4 CFS -$1,100 $550 $600 $100 $100 CFL -$2,700 $650 $725 $800 $1,400,if you choose to accept this assignment please make 100% sure that all answers are 100% accurate. So far of all of the homework that I have sent through here the highest accuracy percentage was 85%. I will provide you with a generous tip just please make sure the answers are all correct.,Here's the same document in word format so it's easier to read some of the statistics towards the later portion of the assignment.
Paper#7174 | Written in 18-Jul-2015Price : $25