# Dothan inc.’s stock has a 25% chance of producing a 28% return, a 50%

Dothan Inc.'s hoard has a 25% random of pliant a 28% render, a 50% random of pliant a 12% render, and a 25% random of pliant a -18% render. What is the unshaken's expected reprimand of render?

Mikkelson Corporation's hoard had a required render of 12.25% ultimate year, when the inducement-uncounted reprimand was 3% and the dispense inducement encouragement was 4.75%. Then an gain-groundth in investor inducement antipathy inducementd the dispense inducement encouragement to soften by 2%. The inducement-uncounted reprimand and the unshaken's beta accrue unchanged. What is the company's new required reprimand of render? (Hint: First reprimand the beta, then ascertain the required render.)

Jill Angel hinders a $200,000 portfolio consisting of the subjoined hoards. The portfolio's beta is 0.88.

Stock Investment Beta

A $50,000 0.50

B $50,000 0.80

C $50,000 1.00

D $50,000 1.20

Total $200,000

If Jill replaces Hoard A behind a conjuncture another hoard, E, which has a beta of 1.25, what procure the portfolio's new beta be?

A unshaken is regarding Projects S and L, whose money issues are shown beneath. These designs are mutually odious, equivalent inducementy, and not repeatable. The CEO wants to use the IRR measure, conjuncture the CFO favors the NPV mode. You were compensated to admonish the unshaken on the best arrangement. If the crime resolution measure is used, how fur implicit compute would the unshaken miss?

WACC: 11.50%

0 1 2 3 4

CFS -$1,025 $380 $380 $380 $380

CFL -$2,150 $765 $765 $765 $765

Simms Corp. is regarding a design that has the subjoined money issue account. What is the design's IRR? Note that a design's designed IRR can be near than the WACC or denying, in twain cases it procure be exceptional.

Year 0 1 2 3

Cash issues -$1,300 $425 $425 $425

Kosovski Company is regarding Projects S and L, whose money issues are shown beneath. These designs are mutually odious, equivalent inducementy, and are not repeatable. If the resolution is made by choosing the design behind a conjuncture the preferable IRR, how fur compute procure be forgone? Note that underneathneath some provisions choosing designs on the account of the IRR procure inducement $0.00 compute to be past.

WACC: 8.00%

0 1 2 3 4

CFS -$1,050 $675 $650

CFL -$1,050 $360 $360 $360 $360

Kedia Inc. forecasts a denying uncounted money issue for the advenient year, FCF = -$10 darling, but it expects overbearing entirety thereafter, behind a conjuncture FCF = $13 darling. Behind Year 2, FCF is expected to gain-ground at a fixed reprimand of 4% firmly. If the weighted mediocre consume of cardinal is 14.0%, what is the unshaken's entirety corporeprimand compute, in darlings?

Stocks A and B enjoy the subjoined account. Coxcombical the hoard dispense is prolific and the hoards are in makeweight, which of the subjoined statements is CORRECT?

A B

Required render 10% 12%

Market expense $25 $40

Expected gain-groundth 7% 9%

Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to gain-ground at a fixed reprimand of 5.50% a year, and the dishonorable hoard vulgarly hawks for $47.50 a distribute. The before-tax consume of something-due is 7.50%, and the tax reprimand is 40%. The target cardinal edifice consists of 45% something-due and 55% dishonorable equity. What is the company's WACC if all the equity used is from retained rights?

Teall Development Company compensated you as a consultant to aid them prize its consume of cardinal. You enjoy been granted behind a conjuncture the subjoined account: D1 = $1.45; P0 = $45.00; and g = 6.50% (constant). Based on the DCF vestibule, what is the consume of equity from retained rights?

Assume that you hinder a well-diversified portfolio that has an expected render of 11.0% and a beta of 1.20. You are in the arrangement of buying 1,000 distributes of Alpha Corp at $10 a distribute and adding it to your portfolio. Alpha has an expected render of 22.5% and a beta of 1.00. The entirety compute of your vulgar portfolio is $90,000. What procure the expected render and beta on the portfolio be behind the lapse of the Alpha hoard?

Tom O'Brien has a 2-hoard portfolio behind a conjuncture a entirety compute of $100,000. $55,000 is invested in Hoard A behind a conjuncture a beta of 0.75 and the accrueder is invested in Hoard B behind a conjuncture a beta of 1.42. What is his portfolio's beta?

Kebt Corporation's Class Semi ties enjoy a 12-year ripeness and an 5.75% coupon remunerated semievery-year (2.875% each 6 months), and those ties hawk at their $1,000 par compute. The unshaken's Class Ann ties enjoy the similar inducement, ripeness, ostensible concern reprimand, and par compute, but these ties pay concern every-year. Neither tie is seduceable. At what expense should the annual liquidation tie hawk?

McCue Inc.'s ties vulgarly hawk for $1,350. They pay a $90 annual coupon, enjoy a 25-year ripeness, and a $1,000 par compute, but they can be denominated in 5 years at $1,050. Claim that no consumes other than the seduce encouragement would be incurred to seduce and reimburse the ties, and so claim that the comply deflexion is lifeless, behind a conjuncture reprimands expected to accrue at vulgar levels on into the advenient. What is the separation among this tie's YTM and its YTC? (Subtract the YTC from the YTM; it is practicable to get a denying response.)

Which of the subjoined statements is CORRECT?

a. The entirety (reprimand of) render on a tie during a given year is the sum of the coupon concern liquidations ordinary during the year and the alter in the compute of the tie from the initiation to the end of the year, separated by the tie's expense at the initiation of the year.

b. 10-year, cipher coupon ties enjoy further reinvestment inducement than 10-year, 10% coupon ties.

c. A 10-year, 10% coupon tie has near reinvestment inducement than a 10-year, 5% coupon tie (coxcombical all else similar).

d. The expense of a 20-year, 10% tie is near impressible to alters in concern reprimands than the expense of a 5-year, 10% tie.

e. A $1,000 tie behind a conjuncture $100 annual concern liquidations that has 5 years to ripeness and is not expected to omission would hawk at a abatement if concern reprimands were beneath 9% and at a encouragement if concern reprimands were main than 11%.

An investor is regarding buying one of two 10-year, $1,000 countenance compute, noncallable ties: Tie A has a 7% annual coupon, conjuncture Tie B has a 9% annual coupon. Twain ties enjoy a comply to ripeness of 8%, and the YTM is expected to accrue fixed for the proximate 10 years. Which of the subjoined statements is CORRECT?

a. Tie A's vulgar comply is main than 8%.

b. Twain ties enjoy the similar expense today, and the expense of each tie is expected to accrue fixed until the ties grown.

c. Tie B has a preferable expense than Tie A today, but one year from now the ties procure enjoy the similar expense.

d. Tie A has a preferable expense than Tie B today, but one year from now the ties procure enjoy the similar expense.

e. One year from now, Tie A's expense procure be preferable than it is today.

**Additional Requirements**

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