Daniel, an investment banker, invested $5,500, $4,600, and $3,300 in shares of three different companies. The market showed potential to grow so he decided to invest an additional total of $2,000. How would he invest this amount into shares of the three companies to maintain the original investment ratio?
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- A. Read and carefully analyze each problem. Answer the following problem. 1. Find the dividend of the stockholder if his Par Value (in Pesos) is 58, Dividend (%) is 3.5% and number of shares is 550. 2. A land developer declared a dividend of P10,000,000 for its common stock. Suppose there are 600,000 shares of common stock, how much is the dividend per share? 3. A certain company gave out P25 dividend per share for its common stock. The market value of the stock is P92. Determine the stock yield ratio. 4. Find the amount of the semi-annual coupon for a P250,000 bond which pays 7% convertible semi-annually for its coupons. 5. Determine the amount of a semi-annual coupon paid for a 3% bond with a face value of P80,000 which matures after 15 years.Suppose you purchase one share of the stock of Volatile Engineering Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The dollar- weighted return on your investment is Answers: А. -1.75%. B. 8.00%. C. 4.08%. D. 8.53%. Е. 12.35%.NAME Herbalife Nutrition Herc Holdings Heritage Insurance Holdings HRTG Hersha Hospitality Trust CIA HT Hershey HSY HTZ SYMBOL CLOSE NET CHG 57.94 -1.39 26.86 -0.71 14.57 -0.38 Hertz Global Holdings Hess Corp. Hess Midstream Partners HLF HRI HES HESM Hewlett Packard Enterprise HPE 16.59 -0.16 106.24 0.80 -0.77 13.27 42.39 0.15 17.87 0.25 13.18 -0.28 VOLUME DIV YIELD P/E 1,149,773 60.41 389,826 72.99 81,929 19.15 732,879 24.16 1,145,889 114.63 52 WK 52 WK HIGH LOW 34.16 1.20 2.07 47.75 -1.71 24.16 3.10 3.35 12.85 0.24 1.65 22.01 -1.02 2,965,201 25.14 16.50 1.12 6.75 ...dd -5.42 89.10 2.89 2.72 22.00 -0.88 13.01 2.24 -2.78 35.59 1.00 2.36 ...dd 47,899 24.51 16.17 1.43 8.00 14.60 12.09 0.45 3.41 11.46 5,969,511 74.81 11,756,695 19.48 **** **** YTD %CHG Figure 2.8 Listing of stocks traded on the New York Stock Exchange Source: WSJ Online, January 4, 2019. 4.67 5.24 -0.23
- You are a Financial Consultant with a share brokerage firm. You have been given the following information about a company: Share Capital : Equity Rs. 4,00,0000Current Liabilities Rs. 1,00,000 (Rs.10) 12% Preference Rs. 1,00,000Fixed Assets Rs. 9,50,000 General Reserve Rs. 1,84,000Current Assets Rs. 2,34,000 10% Debentures Rs. 4,00,000 Additional Information: market price of the share is Rs. 34 and the net profit after tax was Rs. 1,50,000, and the tax had amounted to Rs. 50,000. From the above details, calculate Return on Investment, Return on Shareholders' Funds, EPS, Book value per share and P/E ratio. Also, make your observations about the company on the basis of these ratios. A- B IYou have been appointed as a financial consultant by the directors of Sizonke Holdings. They require you to determine the cost of capital of the company. The following information is available on the capital structure of the company: ✓ 1 500 000 ordinary shares, with a market price of R3 per share. The latest dividend declared was 85 cents per share. A dividend growth of 14% was maintained for the past 5 years. ✓ 1 000 000 11%, R1 preference shares, with a market value of R2 per share. ✓ R1 000 000 9%, debentures due in 7 years and the current yield-to-maturity is 10%. ✓ R700 000 14%, bank loan, due in December 2019. Additional information: - The company has a tax rate of 28%. - The beta of the company is 1.6, a risk free rate of 6% and the return on the market is 15%. 2.1 Calculate the weighted average cost of capital. Use the Gordon Growth Model to calculate the cost of equity. 2.2 Calculate the cost of equity, using the Capital Asset Pricing Model.A. Read and carefully analyze each problem. Answer the following problem. 1. Find the dividend of the stock holder if his Par Value (in Pesos) is 58, Dividend (%) is 3.5%and number of shares is 550. 2. A land developer declared a dividend of P10,000,000 for its common stock. Suppose there are 600,000 shares of common stock, how much is the dividend per share? 3. A certain company gave out P25 dividend per share for its common stock. The market value of the stock is P92. Determine the stock yield ratio. 4. Find the amount of the semi-annual coupon for a P250,000 bond which pays 7% convertible semi-annually for its coupons. 5. Determine the amount of a semi-annual coupon paid for a 3% bond with a face value of P80,000 which matures after 15 years.
- You have been appointed as a financial consultant by the directors of Chennai Holdings. They require you to calculate the cost of capital of the company. The following information is available on the capital structure of the company: • 1 500 000 Ordinary shares, with a market price of R3 per share. The latest dividend declared was 90 cents per share. A dividend growth of 13% was maintained for the past 5 years. • 1 000 000 12%, R1 Preference shares with a market value of R2 per share. • R1 000 000 Debentures due in 7 years with a current market value of R 951 356 and • a before tax cost of 10% • R900 000 14% Bank loan, due in December 2016 Additional information: 1. The company has a tax rate of 30%. 2. The beta of the company is 1.7, a risk free rate of 7% and the return on the market is 15%. Required: 1.1 Calculate the weighted average cost of capital (WACC). Use the Gorden Growth • Model to calculate the cost of equity. (17) 1.2 Calculate the cost of equity, using the Capital Asset…uppose you purchase one share of the stock of Volatile Engineering Corporation at the beginning of year 1 for $36. At the end of year 1, you buy one more share for $30. At the end of year 2, you sell the shares for $36.45 each. Assume no dividends were paid in both years; calculate the time-weighted (geometric average) return and dollar-weighted return on your investment.A sophisticated investor, B. Graham, sold 250 shares short of Amwell, Inc. at $31 a share. The price of the stock subsequently fell to $26 before rising to $46 at which time Graham covered the position (that is, closed the short position). What was the percentage gain or loss on this investment? Use a minus sign to enter the amount as a negative value. Round your answer to two decimal places.
- You are an investment adviser. One of your clients approaches you for your advice on investing in equity shares of Alpha Company. You have collected the following data: Earnings per share last year $6.00 Payout ratio 0.40 Return on equity 0.30 Cost of equity capital 0.20 The company plans to increase the payout ratio to 60% from year 5. Required: i) Estimate the price of an equity share of this company using an appropriate dividend discount model and advise your client whether they should buy a share of the company. ii) Your client is keen to know whether there are any positive growth opportunities from their investment. Explain to your client the meaning of this concept using appropriate calculations. Notes: You need to show detailed calculations in order to receive full marks for this question iii)If there are positive or negative growth opportunities, explain the reason for such opportunities.8.An investor purchased 100 shares of common stock at GH¢20 per share one year ago. The company declared and paid a dividend of GH¢2 per share during the year. The investor sold the stock for GH¢21 per share after the one-year holding period. a.Calculate the HPR for this investment Partition the HPR into dividend return and capital appreciation return .You are an investment adviser. One of your clients approaches you for your advice on investing in equity shares of Alpha Company. You have collected the following data: Earnings per share last year $4.00 Payout ratio 0.40 Return on equity 0.25 Cost of equity capital 0.20 The company plans to increase the payout ratio to 50% after year 5. Required: i) Estimate the price of an equity share of this company using an appropriate dividend discount model and advise your client whether they should buy a share of the company. ii) Your client is keen to know whether there are any positive growth opportunities from their investment. Explain to your client the meaning of this concept using appropriate calculations. Note: Use two decimal places in your calculations