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WACC, CAPM, Holding period returns

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1. Calculating Returns. Suppose a stock had an initial price of $84 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $96. Compute the percentage of total return.
2. Holding Period Returns. A stock has had returns of -17.62 percent, 15.38 percent, 10.95 percent, 26.83 percent, and 5.31% over the past five years, respectively. What was the holding period return for the stock?
3. Calculating Returns. You bought a share of 5.5 percent preferred stock for $92.73 last year. The market price for the stock is now $95.89. What is your total return for last year?
4. Calculating Returns. You bought a stock three months ago for $32.81 per share. The stock paid no dividends. The current share price is $37.53. What is the APR of your investment? The EAR?
5. Portfolio Expected Returns. You own a portfolio that has $3,400 invested in Stock A and $4,100 invested in Stock B. If the expected returns on these stocks are 9.5 percent and 15.2 percent, respectively, what is the expected return on the portfolio?
6. Using CAPM. A stock has a beta of 1.25, the expected return on the market is 11.5 percent, and the risk-free rate is 3.4 percent. What must the expected return on this stock be?
7. Calculating cost of equity. The XOXO Corporation's common stock has a beta of 1.15. If the risk-free rate is 4.5 percent and the expected return on the market is 11 percent, what is XOXO's cost of equity capital?
8. Calculating WACC. Libby Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 15 percent, and the cost of debt is 8 percent. The relevant tax rate is 35%. What is Libby's WACC?

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The solutions shows how to calculate return on equity, cost of equity, etc..

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