Final Question Paper Corporate Finance - 24063 Words

/MiddSuppose that in the coming year, you expect Exxon-Mobil stick to have a volatility of 42% and a beta of 0.9, and Merck s stock to have a volatility of 24% and a beta of 1.1. The risk free interest rate is 4% and the markets expected return is 12%. The cost of capital for a project with the same beta as Merck s stock is closest to: . | d. 12.8% | E[R] = Rf + Beta Ãâ€" Risk Premium = .04 + 1.1 Ãâ€" (.12 - .04) = .128 | Which stock has the highest total risk? | c. Exxon-Mobil since it has a higher volatility | | ------------------------------------------------- If a stock pays dividends at the end of each quarter, with realized returns of R1, R2, R3, and R4 each quarter, then the annual realized return is calculated as†¦show more content†¦| a. .000024% | Stock Name | Price per Share | Shares Outstanding (Billions) | Market Capitalization (Billions) | Percent of Total | Number of Shares | Lowes | $28.80 | 1.53 | $44.06 | 10.6% | 368 | Wal-Mart | $47.90 | 4.17 | $199.74 | 48.0% | 1,002 | Intel | $19.60 | 5.77 | $113.09 | 27.2% | 1,387 | Boeing | $75.00 | 0.79 | $59.25 | 14.2% | 190 | | | Total | $416.15 | | | Number of shares = percentage shares outstanding = 190 / 790000000 = .000024% | If you are interested in creating a value-weighted portfolio of these four stocks, then the percentage amount that you would invest in Lowes is closest to: | d. 11% | Stock Name | Price per Share | Shares Outstanding (Billions) | Market Capitalization (Billions) | Percent of Total | Lowes | $28.80 | 1.53 | $44.06 | 10.6% | Wal-Mart | $47.90 | 4.17 | $199.74 | 48.0% | Intel | $19.60 | 5.77 | $113.09 | 27.2% | Boeing | $75.00 | 0.79 | $59.25 | 14.2% | | | Total | $416.15 | | | The market capitalization for Wal-Mart is closest to: Choose one answer. | a. $200 Billion | Stock Name | Price per Share | Shares Outstanding (Billions) | Market Capitalization (Billions) | Lowes | $28.80 | 1.53 | $44.06 | Wal-Mart | $47.90 | 4.17 | $199.74 | Intel | $19.60 | 5.77 | $113.09 | Boeing | $75.00 | 0.79 | $59.25 | | | Total | $416.15 | | ------------------------------------------------- Use theShow MoreRelatedHum 112 Week 8 Assignment 2 – Project Paper1717 Words   |  7 PagesHUM 112 WEEK 8 ASSIGNMENT 2 – PROJECT PAPER To purchase this Click here: http://www.activitymode.com/product/hum-112-week-8-assignment-2-project-paper/ Contact us at: SUPPORT@ACTIVITYMODE.COM HUM 112 WEEK 8 ASSIGNMENT 2 - PROJECT PAPER The Project Paper focuses on a suggested topic related to art, architecture, history, music, or literature. The project will reflect your views and interpretation of the topic. This project is designed to help you stretch your mind and your abilities toRead MoreSylllabus Mgt/2301148 Words   |  5 PagesCollaborating in a Competitive World.Read this week’s Electronic Reserve Readings. Participation Participate in class discussion. Ongoing 2 Discussion Questions Respond to weekly discussion questions. 5/245/26 2 Learning Team Instructions Resource: Learning Team CharterCreate the Learning Team Charter. 5/27 2 IndividualDecision-Making Process Paper Resource: Ch. 3 of Management: Leading Collaborating in a Competitive World Identify a time in your life when you had to make a personal or professionalRead MoreThe Importance Of Corporate Finance For Managers1353 Words   |  6 PagesUnit One Assignment This paper focuses on the unit one assignment for GB550: Financial Management. This case study focuses on the United States (U.S.) financial system. A series of questions have been developed in order to explain this system to a client looking to start a new apparel company and possibly invest through the company she is seeking advice from. Importance of Corporate Finance for Managers Firms entrust managers to make decisions that will secure the company’s future by maximizingRead Moretuurism3981 Words   |  16 Pages20 Total Guided Learning Hours 200 Consisting of: Teaching Contact Hours 42 Guided Independent Study Hours 158 Assessment: Percentage of final marks assessed by: Exam 60% Coursework 40% Overview and Content 1. Welcome and Introduction to the Module Financial Management builds upon your accounting, finance and business knowledge in Year 1. As such it is assumed that you fully understand your year 1 studies. If you attend all of the lectures and undertake allRead MoreAuditing Standards, Increased Accounting Disclosure, and1488 Words   |  6 Pagesscandals, and subsequent legislative and professional response to these scandals (e.g., ASX Corporate Governance Guide 2003; Sarbanes-Oxley Act 2002). An important question that has been on the minds of many is whether the implementation of stricter auditing standards such as those mandated by the U.S. Sarbanes-Oxley Act would improve the information environment of firms whose shares are publicly traded. In this paper, I investigate the link between information asymmetry, measured by bid-ask spread, andRead MoreAcct 574 Case Study 11093 Words   |  5 Pagesstatements. This happened when billions of euros seem to have gone missing from the company’s accounts. This dramatic collapse has led to the questioning of the soundness of accounting and financial reporting standards as well as of the Italian corporate governance system. Parm alat, which is headquartered in the central Italian city of Parma, was, like most Italian firms, launched as a family business. Under the direction of Calisto Tanzi, the  capofamiglia, he began expanding the business shortlyRead MoreData And Methodology For Research1279 Words   |  6 PagesDATA AND METHODOLOGY In this chapter, data collected for analysis will be discussed. The paper will continue with discussion of the variables included in the sample. Relevance of the variables for the research will be assessed basing on theoretical and empirical evidence. Sample data description Building on the research of previous studies in the area of credit risk, this paper investigates the US corporate bond markets from January 2006 to December 2013. Data on bonds and issuers is extractedRead MoreExecutive Compensation and Corporate Fraud1083 Words   |  5 Pageswitness to some of the worst accounts of corporate fraud ever recorded, with multi-billion dollar companies such as Enron, Tyco, and World-com involved in serious financial scandals. CEOs and senior executives are often the driving force behind such unscrupulous activities by adopting shady accounting practices and other forms of short-termist actions for the purpose of increasing their firm’s stock price and their own personal wealth. The following paper will investigate whether there is a linkRead MoreThe National Culture, Measured By Hofstede Indexes, Influence The Decision Of Ceo Turnover1630 Words   |  7 PagesIntroduction In this paper I examine how cross-sectional differences in the national culture, measured by Hofstede Indexes, influence the decision of CEO turnover. This is an essential question as the decision to replace the CEO of a firm, CEO turnover, is the most critical decision board members make during their tenure. CEO turnover is an important event which provides a corporation an opportunity to amend and revise its direction, leadership and policies. How this decision making process variesRead MoreFinancial: Bond and Money Market845 Words   |  4 PagesChapter 9 Question #1 What characteristics define the money market? -Money market securities are short-term instruments with an original maturity of less than one year. These securities include Treasury Bills, commercial paper, federal funds, repurchase agreements, negotiable certificates of deposit, banker’s acceptances, and Eurodollars. Money market securities are used to â€Å"warehouse† funds until needed. The returns earned on these investments are low due to their low risk and high liquidity