Questions 3-5 are based on the following information. Westover stock is expected to return 36 percent...
Bernard Companies stock has an expected return of 10.75 percent. The stock is expected to return 13.5 percent in a normal economy and 19.6 percent in a boom. The probabilities of a recession, normal economy, and a boom are 5 percent, 80 percent, and 15 percent, respectively. What is the expected return if the economy is in a recession? Multiple Choice −42.77 percent −63.76 percent −59.80 percent −36.72 percent −68.20 percent Crabby Shores stock is expected to return 15.7 percent...
Bernard Companies stock has an expected return of 9.5 percent. The stock is expected to return 11 percent in a normal economy and 13.4 percent in a boom. The probabilities of a recession, normal economy, and a boom are 10 percent, 84 percent, and 6 percent, respectively. What is the expected return if the economy is in a recession?
ABC Corporation stock is expected to return 25 percent in a boom, 12 percent in a normal economy, and -13 percent in a recession. The probabilities of a boom, normal economy and a recession are 7 percent, 90 percent and 3 percent, respectively. What is the standard deviation of the returns on this stock? 2.15 percent 19.54 percent 5.53 percent 6.23 percent
12. A new project is expected to generate an operating cash flow of $38,728 and will initially free up $11,610 in net working capital. Purchases of fixed assets costing $42,800 will be required to start up the project. What is the total cash flow for this project at Time zero? 13. A project will reduce costs by $62,750 but increase depreciation by $14,812. What is the operating cash flow of this project based on the tax shield approach if the...
North Around, Inc. stock is expected to return 22 percent in a boom, 13 percent in a normal economy, and −15 percent in a recession. The probabilities of a boom, normal economy, and a recession are 6 percent, 92 percent, and 2 percent, respectively. What is the standard deviation of the returns on this stock? Please explain your answer.
Midwest Fastener Supply stock is expected to return 16 percent in a booming economy, 12 percent in a normal economy, and −3 percent in a recession. The probabilities of an economic boom, normal state, or recession are 12 percent, 80 percent, and 8 percent, respectively. What is the expected rate of return on this stock? Pleas explain your answer.
A stock has an expected return of 10.35 percent. Based on the following information, what is the stock's return in a boom state of the economy? Probability of State of Economy Rate of Return if State of Economy State Occurs Recession -9.6% .28 Normal 11,1% .41 Boom .31 Multiple Choice 28.62% 25.67% 2987%
A stock has an expected return of 10.38 percent. Based on the following information, what is the stock's return in a boom state of the economy? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .29 − 9.7 % Normal .40 11.2 % Boom .31 ? Multiple Choice 26.35% 28.11% 29.38% 30.66% 24.59%
The rate of return on the common stock of Flowers by Flo is expected to be 13 percent in a boom economy, 11 percent in a normal economy, and only 6 percent in a recessionary economy. The probabilities of these economic states are 15 percent for a boom, 80 percent for a normal economy, and 5 percent for a recession. What is the variance of the returns on this stock?
1. The stock of Blue Water Tours, Inc. is expected to return 21.50 percent in a boom economy, 16.50 percent in a normal economy, and lose 15.50 percent in a recessionary economy. What is the expected rate of return on this stock if there is a 7.00 percent chance the economy booms, and an 83.00 percent chance the economy will be normal? 14.13 percent 13.65 percent 13.40 percent 12.48 percent 2. A stock is expected to earn 15 percent in...