special answer week 1

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I need help to solve some problems from book Corporate Investment Analysis – FINANCE. Book from: Reilly, F. bro!n, ". #$%%&'. Investment Analysis and (o )ana*ement #&th ed.'. )ason, + : -o th/0estern1 Cen*a*e 2earnin*. Book sed -trayer 3niversity. I need help to solve those 4 problems: 5, $, and 4 1) . +n Febr ary 5, yo bo *ht 5%% shares of sto6k in the Fran6es6a Corporatio share and a year later yo sold it for 74& a share. 9 rin* the year, yo re6 dividend of 75. % a share. Comp te yo r (R and (; on this Fran6es6a sto6k investment. (R < Endin* =al e of Investment1Be*innin* =al e of Investment (R < #5%% shares > 74&' ? #5%% shares > 75. %' 5%% shares > 748 (R < 5.5& (; < (R – 5 (; < 5.5& – 5 < %.5& or 5&@ 2) . +n a * st 5 , yo p r6hased 5%% shares of sto6k in the Cara Cotton Compa a share and a year later yo sold it for 7 5 a share. 9 rin* the year, yo re dividends of 74 a share. Comp te yo r (R and (; on yo r investment in Cara (R < Endin* =al e of Investment1Be*innin* =al e of Investment (R < #5%% shares > 7 5' ? #5%% shares > 74' 5%% shares > 7 (R < %.& 8 (; < (R – 5 (; < %.& 8 – 5 < /%.%5 8 or /5. 8@ 7) . ;o are 6onsiderin* a6 irin* shares of 6ommon sto6k in the )adison Beer Corporation. ;o r rate of ret rn e>pe6tations are as follo!s: )A9I-+N BEER C+R(. (ossible Rate of Ret rn (robability / %.5% %.4% %.%% %.5% %.5% %.4% %.$ %.4% Comp te the e>pe6ted ret rn D E #Ri' on yo r investment in )adison Beer. D E #Ri' < #(i'#Ri'

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Special Answer Week 1

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I need help to solve some problems from book Corporate Investment Analysis in FINANCE

I need help to solve some problems from book Corporate Investment Analysis in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning.Book used by Strayer University. I need help to solve those 3 problems: 1, 2, and 3

1). On February 1, you bought 100 shares of stock in the Francesca Corporation for $34 a share and a year later you sold it for $39 a share. During the year, you received a cash dividend of $1.50 a share. Compute your HPR and HPY on this Francesca stock investment.

HPR = Ending Value of Investment/Beginning Value of Investment HPR = (100 shares x $39) + (100 shares x $1.50) 100 shares x $34 HPR = 1.19

HPY = HPR 1 HPY = 1.19 1 = 0.19 or 19%

2). On august 15, you purchased 100 shares of stock in the Cara Cotton Company at $65 a share and a year later you sold it for $61 a share. During the year, you received dividends of $3 a share. Compute your HPR and HPY on your investment in Cara Cotton.

HPR = Ending Value of Investment/Beginning Value of Investment HPR = (100 shares x $61) + (100 shares x $3) 100 shares x $65 HPR = 0.9846

HPY = HPR 1 HPY = 0.9846 1 = -0.0154 or -1.54%

7). You are considering acquiring shares of common stock in the Madison Beer Corporation. Your rate of return expectations are as follows:

MADISON BEER CORP. Possible Rate of Return Probability - 0.10 0.30 0.00 0.10 0.10 0.30 0.25 0.30

Compute the expected return [ E (Ri) ] on your investment in Madison Beer.

[ E (Ri) ] = (Pi)(Ri) [ E (Ri) ] = (0.30)(-0.10) + (0.10)(0.00) + (0.30)(0.10) + (0.30)(0.25) [ E (Ri) ] = 0.075 or 7.5%