Hw 9 fundamentals of corporate finance q.1 initial

HW 9 Fundamentals of corporate finance Q.1 Initial Price 79 Dividend Paid 1.45 Ending Share Price 71 Calculate Total Return Dividend Yield Capital Gains Yield Q2. Suppose a stock had an initial price of $72 per share, paid a dividend of $2.60 per share during the year, and had an ending share price of $84. Compute the percentage total return. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Total return % Q3 Suppose a stock had an initial price of $52 per share, paid a dividend of $1.00 per share during the year, and had an ending share price of $62. What was the dividend yield and the capital gains yield? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Dividend yield % Capital gains yield % Q.6 Returns Year X Y 1 12 % 23 % 2 15 27 3 – 12 – 13 4 11 11 5 10 17 Using the returns shown above, calculate the average returns, the variances, and the standard deviations for X and Y (Do not round intermediate calculations and round your final percentage answer to 2 decimal places. (e.g., 32.16) and variances to 5 decimal places. (e.g., 32.16161)) X Y Average returns % % Variances Standard deviations % % Q8 A stock has had returns of 17.22 percent, 12.30 percent, 6.21 percent, 27.46 percent, and −13.74 percent over the past five years, respectively. What was the holding period return for the stock? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Holding-period return % Q10 A stock has had returns of 16 percent, 23 percent, 15 percent, −11 percent, 30 percent, and −5 percent over the last six years. What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Arithmetic return % Geometric return % Ques. 9 Q 9. What are the portfolio weights for a portfolio that has 134 shares of Stock A that sell for $44 per share and 114 shares of Stock B that sell for $34 per share? (Do not round intermediate calculations and round your answers to 4 decimal places. (e.g., 32.1616)) Portfolio weights Stock A Stock B Q10. You own a portfolio that is 30 percent invested in Stock X, 20 percent in Stock Y, and 50 percent in Stock Z. The expected returns on these three stocks are 9 percent, 15 percent, and 11 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Portfolio expected return % Q11 Based on the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Recession 0.22 0.1 − 0.17 Normal 0.52 0.13 0.12 Boom 0.26 0.18 0.29 Calculate the expected return for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Expected return Stock A % Stock B % Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) Standard deviation Stock A % Stock B % Q12. A stock has a beta of 1.04, the expected return on the market is 10%, and the risk free rat is 3.5%. What must the expected return on this stock be? (Do not round intermediate calculations and round your answers to 2 decimal places.) Expected Return %

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