Answer:
PV = 1.35
FV = 1.8
n = 3
a. Growth rate = Rate(N, -PV, FV)
Growth rate = Rate(3, -1.35, 1.8)
Growth rate = 0.10
Growth rate = 10%
B. Cost of debt Kd (After tax) = 11.5%*(1-0.30) = 8.05%
Cost of preference share Kp = Dividend/Price = 7.6 /[80*(1 - 0.025)] = 9.74%
Cost of equity Ke = D1/P0+g = 1.8/60 + 0.1 = 0.03+0.1 = 0.13 = 13%
c. Source Weight A COC(%)(B) Weight cost of capital(A*B)
Debt 25% 8.05% 2.01%
Preferred stock 10% 9.74% 0.97%
Common stock 65% 13.00% <u>8.45%</u>
Weighted average cost of capital <u>11.44%</u>
Answer:
The correct answer is letter "A": deliverable.
Explanation:
Deliverables is a project management concept that describes an object or service that must be delivered or completed by a certain due date. Deliverables can be tangible or intangible. These include reports, graphic designs, computer system upgrades, analytics, and everything else that helps a larger project lead to completion.
The following is part of the computer output from a regression of monthly returns on Waterworks stock against the S&P 500 index. A hedge fund manager believes that Waterworks is underpriced, with an alpha of 2% over the coming month.
Beta = 0.75
R-square = 0.65
Standard Deviation of Residuals = 0.06 (i.e., 6% monthly)
Assuming that monthly returns are approximately normally distributed, what is theprobability that this market-neutral strategy will lose money over the next month?
Assume the risk-free rate is .5% per month.
Answer:
0.33853
Explanation:
Given that, the expected rate of return of the market-neutral position is equal to the risk-free rate plus the alpha:
0.5%+ 2.0% = 2.5%
Hence, since we assume that monthly returns are approximately normally distributed.
The z-value for a rate of return of zero is
−2.5%/6.0% = −0.4167
Therefore, the probability of a negative return is N(−0.4167) = 0.33853
True. To help travelers know what to expect researchers collect the prices of commodities. In most cases, you can find information before you travel somewhere to see the moeny you may spend on different things like hotel, transportation, food and activities. Researchers put this information up so people can look and get ideas about what they should expect to spend when traveling.