1) a) You invest in a stock that has a share price of $26.05. In one...

1) a) You invest in a stock that has a share price of $26.05. In one year, that price per share is now $44.15. Each share issued a dividend of $2.17. What was your total return (in dollars)?

b) Starbucks has a beta of 1.26. If the expected market return is 4% and the risk free rate is 2%, what is the expected return for Starbucks? Write your answer in percent form, round to two decimal places

Expert Solution

jeff jeffy answered 1 year ago

You hold one share of IBM stock. The current stock price is $56. You are worried...

You hold one share of IBM stock. The current stock price is $56. You are worried that the stock price may decline. Your objective is to get at least $50 from the stock at the end of one year. Assume the volatility of IBM stock (sigma) is 30% and the risk-free rate is 8%. (i) How will you hedge using put option on IBM stock to make sure that you receive at least $50 at the end of the year?...

Walmart has a current stock price of $90, you own 1 share, if they do a...

Walmart has a current stock price of $90, you own 1 share, if they do a 3-for-1 stock split what does that mean for you?

The current price of one share of a certain stock is 100. The price of a...

The current price of one share of a certain stock is 100. The price of a one-year call option on the stock with a strike price of 105 is 10. The risk-free interest rate is 5.884% and the stock’s dividend yield is 2.02% Mr. John would like to create a synthetic long put option on the stock with a strike price of 105 and one year to maturity, using: Stock Call option Cash Determine the amount of cash and the...

One year ago, you purchased a stock at a price of $57.16 per share. Today, you...

One year ago, you purchased a stock at a price of $57.16 per share. Today, you sold 4) your stock at a loss of 18.11 percent. Your capital loss was $12.21 per share. What was the dividend yield on this stock?

The market price of a share of common stock is determined by Select one: a. the...

The market price of a share of common stock is determined by Select one: a. the stock exchange on which the stock is listed b. the president of the company c. individuals buying and selling the stock d. the board of directors of the firm When ____ is greater than the cost of capital the project should be accepted Select one: a. profitability index b. payback period c. internal rate of return d. net present value ____ is defined as...

1. The stock price of Apple is $106. You have $10,000 to invest. The monthly interest...

1. The stock price of Apple is $106. You have $10,000 to invest. The monthly interest rate is 0.5%. a. You think the stock price will go up soon, and want to trade 120 shares. What should you do? Enter 120 for buying 120 shares (on margin if necessary), or -120 for selling or short-selling 120 shares. b. What is your initial percentage margin (entered as a decimal number)? c. Two months later, the stock price is $126. What is...

1. Maritza has one share of stock and one bond. The total value of the two...

1. Maritza has one share of stock and one bond. The total value of the two securities is 1,090 dollars. The bond has a YTM of 12.18 percent, a coupon rate of 11.16 percent, and a face value of 1,000 dollars; pays semi-annual coupons with the next one expected in 6 months; and matures in 17 years. The stock pays annual dividends and the next dividend is expected to be 6.53 dollars and paid in one year. The expected return...

You consider buying a share of stock at a price of $10. The stock is expected...

You consider buying a share of stock at a price of $10. The stock is expected to pay a dividend of $1.00 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $12. The stock's beta is 1.0, rf is 16%, and E[rm] = 26%. What is the stock's abnormal return?

You have $40,600 to invest in Sophie Shoes, a stock selling for $70 a share. The...

You have $40,600 to invest in Sophie Shoes, a stock selling for $70 a share. The initial margin requirement is 75 percent. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any. Ignoring taxes and commissions, calculate your rates of return if the stock rises to $80 a share and if it declines to $35 a share assuming you pay cash for the stock. Rate of return if...

In each of the following? cases, calculate the price of one share of the foreign stock...

In each of the following? cases, calculate the price of one share of the foreign stock measured in United States dollars? (US$). a. A Belgian stock priced at 101.6101.6 euros ?(euro€?) when the exchange rate is 0.84140.8414euro€?/US$. b. A Swiss stock priced at 92.192.1 Swiss francs? (Sf) when the exchange rate is 0.9620.962?Sf/US$. c. A Japanese stock priced at 1 comma 3431,343 yen? (¥) when the exchange rate is 107.1538107.1538?¥/US$. a. The Belgian stock priced in U.S. dollars is ?$nothing....

Question