following events occur‚ other things constant: (1) inflation expectations increase‚ and (2) investors become more risk averse? Shift up and have a steeper slope 8. Modern portfolio theory assumes that most investors are risk: Risk averse The common stock of XMen Inc. had the following historic prices. Time Price of X-Tech 3/01/1999 50.00 3/01/2000 47.00 3/01/2001 76.00 3/01/2002 80.00 3/01/2003 85.00 3/01/2004 90.00 9. Refer to Exhibit. What was your arithmetic mean annual yield
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CFGB6102 Corporate Finance Stock Valuation 1. A firm’s common stock currently sells for $75 per share. The firm has total assets of $1‚000‚000 and total liabilities‚ including preferred stock‚ of $350‚000. If the firm has 10‚000 shares of common stock outstanding‚ (a) what is the book value of each share of common stock? (b) is the stock overvalued or undervalued in the marketplace? (c) what might be the reason(s) for your answer in (b). (a) (b) overvalued (c) market value of the assets
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Manufacting is 50% common stock‚ 15% preferred stock‚ and 35% debt. If the cost of common equity for the firm is 19.6%‚ the cost of preferred stock is 12.9% and the before tax cost of debt is 9.5% what is the weighted average cost of capital? The firm’s tax rate is 35%. Answer: WACC = (50% x 19.6%) + (15% x 12.9%) + ( 35% x 9.5% x 65% = Q2: The following are the information of a company: |Type of capital |Book value (Tk) |Market value (Tk) |Specific cost (%) |
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NURITA F Jurusan Akuntansi‚ Fakultas Ekonomi‚ Universitas Syiah Kuala ABSTRACT The objective of this research is to examine the influences of earnings per share and dividend payout ratio to common stock holding period. The research was conducted at the companies listed in the LQ-45 Index in the Indonesia Stock Exchange in 2008-2010. This type of study is a hypothesis-testing research. The research method used in this research is purposive sampling. Sample in this study are companies registered in
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Stock out cost Economic consequences of not being able to meet an internal or external demand from the current inventory. Such costs consist of internal costs (delays‚ labor time wastage‚ lost production‚ etc.) and external costs (loss of profit from lost sales‚ and loss of future profit due to loss of goodwill). Also called shortages costs. The cost associated with being unable to draw on a stock of raw material‚ work-in-progress or finished goods inventory (loss of sales‚ profits and goodwill
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Journal of Financial COMMON Economics 9 (1981) 139-183. STOCK REPURCHASES North-Holland Publishing Company AND MARKET SIGNALLING An Empirical Study* Theo VERMAELEN lJ/niversity of British Columbia‚ Vancouver‚ BC‚ Canada V6T 2 W5 Received January 1980‚ final version received January 1981 This paper examines the pricing behavior of securities of firms which repurchase their own shares. The results are consistent with a market in which investors
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Common Risk Factors in the Retu rns on Stocks and Bonds Eugene F. Fama Kenneth R. French Journal of Financial Economics 1993 Presenter: 周立軒 Brief Saying… • This paper identifies Five common risk factors in the return on stocks and bonds – Two stock market factors‚ two bond market factors ‚ one market factor. – The five factors seems to explain all returns in stoc k market and bond market • Except the Low-Grade Bonds Agenda • • • • • Introduction The Steps of the Experiment Data & Variables Main
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Differences between Preferred and Common Stock All stock is not created equal. Companies offer two main types of stock: common and preferred stock‚ each with its share of advantages and disadvantages for investors. Preferred and common stocks are different in two key aspects. First‚ preferred stockholders have a greater claim to a company’s assets and earnings. This is true during the good times when the company has excess cash and decides to distribute money in the form of dividends to its
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amount. It is therefore necessary‚ to understand the nature of the relationship between dividend and value of the firm. It is in the light of this that the study examines the possible effects of a firm’s dividend policy on the market price of its common stock with reference to the Nigerian context‚ using Nestle Nigeria Plc. as case study. In so doing‚ the methodology adopted include the use of ex post facto research techniques to acquire data and the use of co-relational research techniques‚ which featured
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1. (Problem 1.12) Suppose bank’s loan officer tells you that if you take out a mortgage (i.e.‚ you borrow money to buy a house) you will be permitted to borrow no more than 80% of the value of the house. Describe this transaction using the terminology of short-sales. Answer: We are interested in borrowing the asset “money” to buy a house. Therefore‚ we go to an owner of the asset‚ called Bank. The Bank provides the dollar amount‚ say $250‚000‚ in digital form in our mortgage
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