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Expected return and Standard Deviation of a Portfolio..

Suppose Johnson & Johnson and the Walgreen Co. have expected returns and volatilities shown below, with a correlation of 22%. Calculate a) the expected return and b) the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock. E[R] SD[R] Johnson & Johnson 7% 16%

Value of investment portfolio after price changes, RRI

You are considering how to invest part of your retirement savings. You have decided to put $200,000 into three stocks: 50% of the money in GoldFinger (currently $25/share), 25% of the money in Moosehead (currently $80/share), and the remainder in Venture Associates (currently $2/share). If Goldfinger stock goes up to $30/shar

Fixed Rate Mortgage Payment

Please help with the following problem. Your family recently obtained a 30 (360 month) $100,000 fixed rate mortgage. Which of the following statements is most correct and why? (ignore taxes and transactions costs). A. The remaining balance after 3 years will be $100,000 less the total amount of interest paid during the fi

Constant growth stock for ABC company

The last dividend paid by ABC company was $2.00. ABC's growth rate is expected to be a constant 4 percent. ABC's required rate of return on equity (KS) is 9 percent. What is the current price of ABC's common stock?

Collegiate Tuxedo Opportunity Cost of Instant Electronic Checks

Collegiate Tuxedo rents apparel throughout the year. They have experienced non-payment by about 15% of their customers with an average loss of $200. Collegiate wants to stem their losses by using an instant electronic credit check on the customer. These checks will cost them $7 on each of the 1,000 customers. The opportunity cos

Break-even Analysis Case

I need to design and develop a financial model that arrives at a correct answer/estimation for the specified problem, and supports future decision-making. In addition to solving the problem and creating the model, I need to prepare a spreadsheet/model map that documents use of the model for future users. The project will be gr

Comparing Holding-Period Returns

a. Compute the holding-period returns for Renee and Lester for periods 2 through 4. Period Renee Lester 1 $9 $27 2 11 28 3 10 32 4 13 29 b. How would you interpret the meaning of the holding-period return?

Haywood Industries: Evaluate Investment A and B

*See values in attachment* Haywood Industries, has prepared the following information regarding two investments under consideration. Which investment should be accepted? Please provide supporting calculations for your choice. A. Investment A is better. It has a higher expected return with less risk. B. We cannot say whi

Amortization and Income Statements

1. To buy a new house you take out a 25 year mortgage for $300,000. What will your monthly interest rate payments be if the interest rate on your mortgage is 8 percent? rate (i) = number of periods (n)= present value (PV) =$300,000 future value (FV) =$0 type (0 = at end of period) =0 monthly mortgage payment= 2.

Intangible Assets: Amortization for year 5 for a patent

A company purchases a patent for $900K with an estimated life of 15 years. It is subsequently reduced to 10 years. During year 5, the product for which the patent is held is removed from market. Does the company book 90,000 in depreciation for year 5? If not, what amount do they book?

Corporate Investing: A Case Study on Disney

Choose a stock from any company in any industry. Then visit Yahoo Finance at http://finance.yahoo.com/?u. Once there, enter the ticker symbol for your stock in the space provided so that you can be taken to pages where you will see a comprehensive set financial information- including the latest price- related to your company of

Holding Period Returns and Standard Deviation

a) Use the price data from the table (data is in the attached document) for the Standard & Poor's 500 Index, Wal-Mart, and Target to calculate the holding-period returns for the 24 months from March 2004 through March 2006. b) Calculate the average monthly holding-period returns and the standard deviation of these returns f

Decision under uncertainty

Suppose that the Beauty Company faces the choice of introducing a new beauty cream or investing the same amount of money in Treasury bills with a return of $10,000.00. If the company introduces the beauty cream, there is an 80 percent probability that a competing firm will introduce a similar product and a 20 percent chance that

Par Value Bond and Interest

Imagine you are thinking about the purchase of a $1000 par value bond that pays interest of $70 each six months and has ten years to go before it matures. If you buy this bond, you expect to hold it for 5 years and then sell it in the market. You currently require a nominal annual rate of 16%, but you expect the market to requir

Valuation in a Private Equity Setting

In 2005 Dub Tarun founded a firm using $200,000 of his own money, $200,000 in senior (bank) debt, and an additional $100,000 in subordinated debt borrowed from a family friend. The senior debt pays 10% interest, while the sub debt pays 12% interest and is convertible into 10% of the firm's equity ownership at the option of the i

Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University.

I need help to solve some problems from book Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University. I need help to solve those problems: 4, 5, and 6 Please

Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University.

I need help to solve some problems from book Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University. I need help to solve those 3 problems: 1, 2, and 3 Pleas

Net Period of Delta Distributors

21. Delta Distributors has an investment in accounts receivable of $2,750,000. Daily credit sales are $118,280. If 30% of Delta's credit customers receive a discount by paying within 10 days and the remainder of Delta's customers pay in 40 days, what is the net period that Delta maintains? A. 19 days B. 31 days C. 37 days

Portfolio weight

6. You own the following portfolio of stocks. What is the portfolio weight of stock C? Number Price Stock of Shares per Share A 100 $22 B 600 $17 C 400 $46 D 200

Comparing stock A to stock B

4. You are . Given the following information, which one of these two stocks should you prefer and why? Rate of Return if State of Probability of State Occurs Economy State of Economy Stock A Stock B Boom 60%

Disney in 2007 and 2008; analyze and compare the ratios

See the attached file: Evaluate your selected organization's financial performance over the past two years using financial ratios. Calculate the following ratios for each year: a) Current b) Debt c) ROI (return on investment) d) Days receivable 2008 current ratio current assets 11,666,000 curent liabili 11,59

VC Valuation and Deal Structuring

In 2005 Dub Tarun founded a firm using $200,000 of his own money, $200,000 in senior (bank) debt, and an additional $100,000 in subordinated debt borrowed froma family friend. The senior debt pays 10% interest, while the sub-debt pays 12% interest and is convertible into 10% of the firm's equity ownership at the option of the in

Long term financial planning

Why is long range financial planning critical to an organization's future? How do firms decide on objectives and targets? What are some methods for satisfying an organization's long-term capital needs? Do not want an analze, just need suggestions to these questions.

Elements of Credit Policy

What are four elements of a new firm's credit policy? To what extent can firms set their own credit policies as opposed to having to accept policies that are dictated by "the competition"?

What is the effect of transactions on various financial ratios?

I need to know the effect that each transaction will have on the financial ratio listed opposite it. Please use + for increase, - for decrease, and NE for no effect. Also, please give a short explanation for each answer. Assume that current assets exceed current liabilities in all cases, both before and after the transaction. He

Wal-Mart: Financial Analysis and Management Teams

Go to the Yahoo Stock Screener and use this page to find Wal-Mart. Write a paper discussing what you find interesting about Wal-Mart and whether or not you think Wal-Mart will have a successful future. Get to the Wal-Mart web site, into the "investors relations" section and provide some financial highlights of Wal-Mart for t

Risk Avoidance and Risk Retention

a. Discuss how risk avoidance might prove advantageous in your company or one with which you are familiar. b. How do the concepts of risk retention and risk transfer apply to your company or one with which you are familiar. c. Congratulations! You have just been promoted to the position of Supervisor of Risk Management fo

The Economically Rational Value of a Stock

Assume IBM is expected to pay a total cash dividend of $3.60 next year and dividends are expected to grow indefinitely by 3 percent a year. Assume the required rate of return (i.e. equity holder's opportunity cost of capital) is 9 percent. Assuming this is the best information available regarding the future of this firm, what