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Ksivusya [100]
3 years ago
9

12’) The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $200 million. It has liabilities

of $6 million and 10 million shares outstanding. If the fund sells for $25 a share, what is its premium or discount as a percent of NAV?
Business
1 answer:
murzikaleks [220]3 years ago
8 0

Answer: 28.87%

Explanation:

Given the following ;

Portfolio worth = $200,000,000

Liabilities = $6,000,000

Outstanding shares = $10,000,000

Share value = $25 per share

NAV, The Net Asset Value of the Stone Harbor Fund is the difference between total worth of it's asset and it's Liabilities.

Net Asset Value = (portfolio worth - Liabilities) ÷ outstanding shares

NAV = $(200,000,000 - 6,000,000) ÷ $10,000,000

NAV =$194, 000,000 ÷ $10,000,000

NAV = $19.4

Premium = $25 - $19.4 = $5.6

Expressed as a percentage of Net Asset Value:

$(5.76 ÷ 19.4) × 100 = 0.2886 × 100 = 28.87%

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A risky fund has an expected return of 17% and standard deviation of 25%. The risk-free rate is 9%. The expected return of the o
Marrrta [24]

Answer:

the Sharpe ratio of the optimal complete portfolio is 0.32

Explanation:

The computation of the sharpe ratio is shown below:

= (Return of portfolio - risk free asset) ÷ Standard deviation

= (17% - 9%) ÷ 25%

= 8% ÷ 25%

= 0.32

Hence, the Sharpe ratio of the optimal complete portfolio is 0.32

We simply applied the above formula

4 0
3 years ago
Which type of insurance covers preventive care and medical treatment?
dezoksy [38]
Health insurance is the answer
6 0
3 years ago
ENETEAU CORPORATION
4vir4ik [10]

Answer:

See below

Explanation:

Statement of cash flows for the year ended December 31, 2020 using the indirect method.

Cash flow from operating activities:

Net loss = $12,000

Adjustment to reconcile net loss with cash flows from operating activities:

Depreciation = ($20,000 + $10,000 - $13,000) = $7,000

Loss on sale of land = $2,000

Increase in accounts receivable = ($20,000)

Increase in prepaid expense = ($5,000)

Increase in accounts payable = $6,000

Net cash used in operating activities = ($12,000)

Cash flow from investing activities

Sale of land = ($40,000 - $18,000 - $2,000) = $20,000

Sale of equipment = $5,000

Net cash generated by investing activities = $25,000

Cash flow from financing activities

Retirement of bond = ($12,000)

Proceeds from issuance of bonds = $20,000

Net cash used by financing activities = $8,000

Net increase in cash = $6,000

Add: beginning cash balance = $31,000

Ending cash balance = $37,000

Workings

• Calculation of depreciation

The accumulated depreciation at the end of the year 2020 = ($20,000)

Hence;

Accumulated depreciation at the end of the year 2020 = ($13,000)

Increase in accumulated depreciation during 2020 = $20,000 - $13,000 = $7,000

Add: accumulated depreciation on equipment sold during 2017 = $10,000

Total depreciation expense for 2020 = $7,000 + $10,000 = $17,000

• Calculation of proceeds from sale of land:

Cost of land = $40,000 - $18,000 = $22,000

Loss on sale of land = $2,000

Therefore,

Proceeds from sale of land = cost of land sold - loss on sale of land

= $22,000 - $2,000

= $20,000

• Calculation of issuance of bonds payable during 2020

The bonds payable at the end of year 2019 = $19,000

Hence,

Bonds payable at the end of year 2020 = $27,000

Retirement of bonds during year 2020 = $12,000

Therefore,

Bonds issued during 2020 = $27,000 + $12,000 - $19,000 = $20,000

4 0
2 years ago
How many references does an employer usually want?
creativ13 [48]
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6 0
3 years ago
You have been hired by the CFO of Lugones Industries to help estimate its cost of common equity. You have obtained the following
LekaFEV [45]

Answer:

Under CAPM:

Re = Rf + Beta(Rm - Rf)

Rf = 5%

Rm - Rf = 6%

Beta = 1.25

Re = 5% + (1.25 x 6%) = 12.5%

Under dividend discount model:

Re = (Div₁ / P₀) + g

Div₁ = $1.20

P₀ = $35

g = 8%

Re = ($1.20 / $35) + 8% = 11.43%

Under bond yield plus risk premium approach:

Re = Pre-tax cost of debt + risk premium over its own debt

Pre-tax cost of debt = 7%

risk premium over its own debt = 4%

Re = 7% + 4% = 11%

The highest cost of equity results from the CAPM model and it is 12.5% while the lowest results from using the bond yield plus risk approach (11%), the difference is 1.5% between them.

7 0
3 years ago
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