You are forming an equally weighted portfolio of stocks. There are many stocks that all have the same beta of 0.84 for factor 1 and the same beta of 1.69 for factor 2. All stocks also have the same expected return of 11 percent. Assume a two-factor model describes the returns on each of these stocks. a. Write the equation of
Please see attachment for 16 questions: some short answer, some long. Please identify variables and provide clear explanations to study questions. These are samples I will be studying from. ** See ATTACHED file(s) for complete details ** 3.7. Assume Poland's currency (the zloty) is worth $.17 and the Japanese yen is worth
AOL AND TIME WARNER: FRAGILE PROMISES . Why did the media refer to the merger as the deal of the century? . Why was Time Warner eager to merge with AOL? . What challenges did AOL and Time Warner face as a merged company? . How is the company doing financially? How much turnover has occurred among high-level executives?
What are the different types of bonds? Please help me with this.
What are the advantages and disadvantages of using bonds as opposed to stocks in order to raise money?
The available options of the firm with an overhanging issue to finance the call do NOT include which of the following: Selling additional debt resulting in a higher debt ratio, Using current retained earnings, Selling additional common equity resulting in less dilution of eps, or Selling additional preferred stock res
A firm needs $1.5 million of long-term financing. The firm is considering the sale of common stock or a convertible bond. The current market price of the common stock is $16 per share. To sell this new issue, the stock would have to be underpriced by $1 and sold for $15 per share. The firm currently has 600,000 shares of com
I am trying to answer the following two part question: (a) You own 100 shares of GE stock. In terms of riskiness, rank the positions form by alternatively combining with a long call, a long put, writing a call and writing a put, and briefly explain why? (b) You are short 100 shares of GE stock. In terms of riskiness, r
Question: How is NVR, Inc. compared to Toll Brothers in terms of performance (stocks, income, sales. dividends, profit.. ) Stock ticker: NVR ane TOL I need to know how well these stocks are performing and why one or the other is better. I am writing a research paper, and one of the question i need help is hwo well both sto
I am trying to do a reseach paper on both NVR and CTX who are both in the same industry. I need to compare both companies in terms of performance and stocks. 2 Stocks to compare (CTX) Centex Corporation (NVR) NVR, Inc
I need a stock comparison of performance comparing NVR to CTX, i am trying to write a page or 2 on researching how both these industries compare in terms of performance. Stocks (CTX) Centex Corporation (NVR) NVR Mortgage Finance, Inc
I condensed down 60 pages to 10, I have provided the next steps using people, routines, architecture, and culture to help solve the growing costs, and impact to the bottom line. My concern is what is advantages or disadvantages of the approach of using the option recommended. Or any suggestion you may see, that my reasoning
Question: If the bank decides to withdraw the entire line of credit and to demand immediate repayment of the two existing loans (the short-term and long-term loans) extended to Garden State Corp., what alternatives would be available to Garden State? I can not figure out any alternative except looking for assets to pay it
Explain how you would solve this problem. Specify the steps you would take and equation(s) you would use) Cartwright Brothers' stock is currently trading for $40 a share. The stock is expected to pay a $2 dividend at the end of the year. The stock's dividend is expected to grow at a constant rate of 7% a year forever. The ri
If one of your stocks has a relatively high beta of 1.4 and is currently doing exceedingly well, why would you want a stock in your portfolio with a relatively low beta of 0.7 that has been recently underperforming? By diversifying your investment according to beta, have you entirely removed the potential risk of lossess due to
What is the difference between an option contract and a future contract?
Why would an investor buy an option to either buy or sell a stock?
Please answer the questions, notes are in attachment 2 & 3.
1. Which of the following factors does not contribute to dividend's effects on a firm's value. a. personal taxes b. corporate taxes c. transaction costs d. flotation costs 2. Which of the following policies is most likely to produce a zero dividend now and then? a. constant-dollar dividend policy b. constant-payout-
Assume you are responsible for the management of Bank-ZQ's UK fund and in the process are deliberating a covered call writing strategy. Comment on the pros and cons associated with writing FTSE100 call options traded on the London Futures and Options exchange.
If I believe interest rates will fall sharply over the next sixth months, what type of bonds should I purchase to provide capital gains on the interest rate move? If I expect rates to rise, what bonds should I purchase?
A convertible bond pays a 10% coupon, with semiannual payments, has a $1,000 face value, matures in 10 years, and is convertible into 40 shares of the firm's common stock. The stock is currently selling for $30 a share. If similar risk bonds are currently yielding 8%, what is the minimum price at which this bond should sell?
A stock that does not pay dividends trades for $25. a. What is the value of a European call option on the stock with 4 months to maturity, if the volatility of the stock is 30% per annum, the strike price is $28 and the riskless rate is 10%? b. What would be the value of the above option if you expected that the volatility o
How can I use binomial model to answer to the following questions? Consider the stock with the current price of $20. It pays no dividends. 1) Maturity: in 4 months Strike price:$20 Volatility = 30% per annum Risk-free rate: 10% What's the value of European call option? 2) What would be the value of option in 1), i
C1. Value a one-year call option on a stock (Alpha PLC, Ltd.) whose current price is $35. In one year the stock will be worth either $42 or $29.75, and the riskless interest rate for the next year is (what else?) 10% The option's exercise price is $40. What is the option's payoff in the stock's "up" state? Why? What is the op
Fill in the blanks by choosing the appropriate term from the following list: lease, funded, floating-rate, eurobond, convertible, subordinated, call, sinking fund, prime rate,private placement, public issue, senior, unfunded, eurodollar rate, warrant, debentures, term loan. a. Debt maturing in more than 1 year is often cal
Briefly list fitteen courteous actions or statements that you consider to be essential. For example, "saying thank you."
1) Suppose you own a large forest that is due for harvest. The pulp market is picking up, so you know that if you start harvest this year you will forgo rising prices in the future. There is, however, a cost advantage to starting the harvest as soon as possible. The table below shows the present value of the revenue stream and t
A review of the accounting records at Corless Co. revealed the following information concerning the company's liabilities that were outstanding at December 31, 2002, and 2001, respectively. Debt (thousands) 2002 Year end interest rate 2001 Year end interest rate Short term debt:
Which choice is correct and why? If a firm adheres strictly to the residual dividend policy, then if its optimal capital budget requires the use of all earnings for that year (along with new debt according to the optimal debt/total assets ratio), the firm should pay a. no dividends except out of past retained earnings. b