Question
In: Finance
Given below are likely returns in case of shares of Sun Ltd. and Moon Ltd. In...
Given below are likely returns in case of shares of Sun Ltd. and Moon Ltd. In the various economic conditions. Both shares are presently quoted at Rs. 100 per share.
Economic Condition Probability Returns of Sun Ltd.(%) Returns of Moon Ltd.(%)
High Growth 0.3 100 150
Low Growth 0.4 110 130
Stagnation 0.2 120 90
Recession 0.1 140 60
Compute – Expected Return and Standard Deviation for both stocks and provide your suggestion for suitable investment.
( The answer should be a min of 800 Words with a theory explanation )
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Sun Company and Moon Company are identical in all respects except that most of Sun company...
Sun Company and Moon Company are identical in all respects
except that most of Sun company costs are variable, and most of
Moon company costs are fixed. In case sales increase (for both
companies), which of the two companies will tend to realize the
greatest increase in its net income?
1. What is the significance of the ecliptic? Why are the sun, the moon, and the...
1. What is the significance of the ecliptic? Why are
the sun, the moon, and the planets only found near the
ecliptic?
2. What is the difference between a constellation and asterisk?
Give two examples of each
what are the relative positions of the Earth, the Sun, and the Moon during a Solar...
what are the relative positions of the Earth, the Sun, and the Moon
during a Solar eclispe?
KST Ltd manufactures running gear for athletes. The returns of KST Ltd shares have a covariance...
KST Ltd manufactures running gear for athletes. The returns of
KST Ltd shares have a covariance with the market portfolio of 0.02.
The standard deviation of the market portfolio’s return is 12.5
percent, the market risk premium is 8.2 percent, and the riskfree
rate of return is 8 percent. KST Ltd has $23 million of 13 percent
bonds on issue which currently have a market yield to maturity of
12 percent. The market value of the bonds is $24 million....
Throughout 2020, Moon Ltd. had 1,200,000 common shares outstanding. As well, the corporation paid $300,000 in...
Throughout 2020, Moon Ltd. had 1,200,000 common shares
outstanding. As well, the corporation paid $300,000 in preferred
dividends and reported net income of $5,100,000 for 2020. In
connection with the acquisition of a subsidiary company in June
2019, Moon is required to issue 50,000 additional common shares on
July 1, 2021, to the former owners of the subsidiary.
Moon’s diluted earnings per share for 2020 should be:
$4.25.
$4.08.
$4.00.
$3.84.
During a solar eclipse, the moon, Earth, and sun lie on the same line, with the...
During a solar eclipse, the moon, Earth, and sun lie on the same
line, with the moon between Earth and the sun. (a) What force is
exerted on the moon by the sun? N (b) What force is exerted on the
moon by the Earth? N (c) What force is exerted on the Earth by the
sun? N
(Average Earth-moon distance = 3.84 ✕ 108 m, Average Earth-sun
distance = 1.5 ✕ 1011 m, mass of the moon = 7.35...
The student observed the Moon to be about 12 degrees west of the Sun. What (major)...
The student observed the Moon to be about 12 degrees west of the
Sun. What (major) phase will the Moon be in one day later?
explain
Given the following case, answer questions 18 and 20 below: Group Co currently has 4,000 shares...
Given the following case, answer questions 18 and 20
below:
Group Co currently has 4,000 shares outstanding each
sold for $100, whereas, Intel Inc has 3,000 shares outstanding each
sold for $50. The earnings per share for Group Co and Intel Inc is
$11 per share. Group Co decides to acquire Intel Inc by offering
three new shares of Group Co for every six shares of Intel Inc.
Assume that the merger increases the value of the combined firms by...
The Articles of Partnership for partners Moon, Sun, and Stars stipulate 10% interest allowance for each...
The Articles of Partnership for partners Moon, Sun, and Stars
stipulate 10% interest allowance for each partner based on average
capital balances during 2020. The beginning capital balances for
Moon, Sun, and Stars on January 1, 2020 are $100,000, $250,000, and
$400,000, respectively. On April 1, 2020, Moon invests additional
20,000 in the partnership. On July 1, 2020 Star withdraws 50,000
from the partnership. During 2020, Sun and Stars have drawings of
60,000 and 20,000, respectively.
During 2020, partners Sun...
The Articles of Partnership for partners Moon, Sun, and Stars stipulate 10% interest allowance for each...
The Articles of Partnership for partners Moon, Sun, and Stars
stipulate 10% interest allowance for each partner based on average
capital balances during 2020. The beginning capital balances for
Moon, Sun, and Stars on January 1, 2020 are $100,000, $250,000, and
$400,000, respectively. On April 1, 2020, Moon invests additional
20,000 in the partnership. On July 1, 2020 Star withdraws 50,000
from the partnership. During 2020, Sun and Stars have drawings of
60,000 and 20,000, respectively.
During 2020, partners Sun...
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