Printers Rs 150 billion 1.00 ABC Computers Ltd had Rs 50 billion in debt outstanding. Required: (i) Estimate the beta for ABC Computers Ltd as a company. Is this beta going to be equal to the beta estimated by regressing past returns on ABC Computers stock against a market index. Why or why not? (ii) If the Treasury bond’s rate is 7.5%‚ estimate the cost of equity for ABC Computers Ltd Estimate the cost of equity for each division. Which cost of equity would you use to
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assets that will in returns provide them with return in form of : interest‚ dividends or capital gains. Through investment investor required a return that compensates him for the time the money is committed‚ the inflation rate and the uncertainty of future payments. According to that investors expect to receive returns on future for his investments. Figure [ 1 ] the risk return trade off One of the most important concepts that any investor should realized is the risk return trade off. Risk is
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know it has to be less than $200. Total 5.00 / 5.00 Question Explanation Simple PV calculation. Question 4 (10 points) Jeff has $1‚000 that he invests in a safe financial instrument expected to return 3% annually. Marge has $500 and invests in a more risky venture that is expected to return 7% annually. Who has more after 20 years? And how much does he/she have in FV terms? Your Answer Score Explanation Marge; 1935 ✔ 10.00 Correct. You know how to calculate FVs! Total 10.00 / 10
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difficult because it is not easy to observe cash flows directly. The reasons are: a. Cash flows are sometimes difficult to identify. b. The timing of cash flows is difficult to determine. c. Cash flows are uncertain and therefore risky. 1.2 ( What is a contingent claim? A contingent claim is a claim whose payoffs are dependent on the value of the firm at the end of the year. In more general terms‚ contingent claims depend on the value of an underlying asset. (
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Chapter 1: No Return The story begins as the author is notifying the reader about the Sunday rituals that are performed by the prisoners. The orders are given by Vacek who makes the prisoners produce whipping sounds with their caps. Eventually people began dying because they could not follow orders. In addition the Vacek killed disabled people‚ for example the man with the paralyzed arm and the deaf tailor. The killings did not stop and more people were killed. To make the scenario worse prisoners
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following analysis will discuss the importance of cost relationship behaviors and how that affects Guillermo’s management decisions. It will also cover the current Management Control System‚ the current break even-analysis‚ and finally the current: return on investment‚ residual income‚ and economic value added. Together these tools will help Guillermo properly make the right decisions for his business as well as contribute to future business model. Cost Relationship Behaviors Manager’s decisions
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1. Barker Corp. has a beta of 1.10‚ the real risk-free rate is 2.00%‚ investors expect a 3.00% future inflation rate‚ and the market risk premium is 4.70%. What is Barker’s required rate of return? Answer D | | | |2010 |21.00% | |2009 |-12.50% | |2008
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Forces analysis shows that the cinema exhibition business is a business with large threats‚ mainly due to high degree of competition and strong barriers to entry; therefore‚ in that the forces are intense‚ little chance will easyCinema earn attractive returns on investment. * Supplier Power The suppliers‚ which is the distributors in this case‚ have large power over the admission price and the film rental contract. * Buyer Power Although the number of customers is large‚ the need for going
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that security prices fully reflect all available information in an efficient market‚ which allows investors to earn no above average risk-adjusted return (Fama‚ 1965). Although some technical studies and opportunistic investors have stretched hard in searching for proofs to challenge the efficient market hypothesis‚ and to prove above average returns could be gained by predicting the future price using the existing information‚ their efforts result only in finding of the ¡®anomalies¡¯ in the market
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operating profit‚ EBTDA or residual income. Ratio measures consist of such things as ROI‚ ROE‚ return on net assets‚ or risk adjusted return on capital. Reasons for the use of accounting information in performance measures are due to Accounting based measures being Precise‚ Objective‚ Timely‚ Understandable‚ & Cost Efficient thus meeting the measurement criteria satisfactorily. As Accounting Profits & Returns can be measured on a timely basis relatively precisely and objectively‚ it is possible to
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