1. Julio purchased a stock one year ago for $27. The stock is now worth $32, and the total return to Julio for owning the stock was 37 percent. What is the dollar amount of dividends that he received for owning the stock during the year?

2. Babs purchased a piece of real estate last year for $85,000. The real estate is now worth $102,000. If Babs needs to have a total return of 25 percent during the year, then what is the dollar amount of income that she needed to have to reach her objective?

3. The beta of Elsenore, Inc., stock is 1.6, whereas the risk-free rate of return is 8 percent. If the expected return on the market is 1.5 percent, then what is the expected return on Elsenore?

4. The risk-free rate of return is currently 3 percent, whereas the market risk premuium is 6 percent. If the beta of Lenz, Inc., stock is 1.8. then what is the expected return on Lenz?

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1. Julio purchased a stock one year ago for $27. The stock is now worth $32, and the total return to Julio for owning the stock was 37 percent. What is the dollar amount of dividend that he received for owning the stock during the year?

Capital Gain=$32-$27=$5
Total Return=$27*37%=$9.99

Dividend Return=Total Return-Capital ...

Solution Summary

There are four basic problems in finance. Solutions to given problems explain the methodology to find out the dollar return and rate of return in different cases.

5. Calculating Expected Return. Based on the following information, calculate the
expected return.
State of Probability of State Rate of Return
Economy of Economy if State Occurs
Recession .30

11-31. Calculating Portfolio Weights and Expected Return. You have a portfolio with the following:
Stock Number of Shares Price Expected Return
W 500 $34 12%
X 300 22 16
Y 600 78 14
Z 800 53 15
What is the expected return of your portfolio?

Based on the following information calculate the expected return.
State of Economy | Probability of State of Economy | Rate of Return if Status Occurs
Recession .25 -.09
Normal .45 .11
Boom

#1. Which amount is worth more at 14 percent, $1,000 today or $2,000 in 6 years?
#2. You are offered a note for $13,250 that will pay $2,345.05 every year for 10 years. If you purchase the note, what rate of interest to the closest percent will you be earning?

A machine was purchased for $10,000. The net income from the machine is as follows:
Year 1 $3,000
Year 2 2,000
Year 3 1,000
A. Calculate the accounting rate of return.
B. What are the drawbacks to using the accounting rate of return as a method of selecting projects?

Calculate the expected return on the portfolio [E ( R )] of the following assets if you invest 20% in asset 1, 30% in asset 2, and 50% in asset 3. How and why will your answer change if you shift 20% of invested funds from the least risky (asset 3) to the most risky (asset 1) asset?
Asset Return
1.

Note: Please see the attachment to view the table which is needed for this question.
Question: You invest 30% in Ham and 70% in Cheese. Find thereturn and variance on the portfolio. You must calculate: expected return for both firms; standard deviation or variance (assume it is a population (n observations)) for both firms;

Referring to the TMCC Security who promised to repay $100,000 in 30 years for a loan of $24,099 on March 28, 2008.
a. Based on the $24,099 price, what rate was TMCC paying to borrow money?
b. Suppose that, on March 28, 2020, this security's price is $38,260. If an investor had purchased it for $24,099 at the offering and so

As the manager of Losen Division of McCarthy Corporation, you are interested in determining the division's return on investment. As division manager, you have no control over financing assets, but you control acquisition and disposition of assets. The division controller has given you the following data to aid you in calculati

Calculate the expected return.
State of Economy Probability of State of Economy Portfolio Return If State Occurs
Recession 0.30 -0.14
Boom 0.70 0.22.
See the attached file.