Find the real return on the following investments: Stock Nominal Return Inflation A 10% 3% B 15% 8% C -5% 2% ? Find the real return, nominal after-tax return, and real after-tax return on the following: Stock Nominal Return Inflation Tax Rate X 13.5% 5.0% 15% Y 8.7% 4.7% 25% Z 5.2% 2.5% 28% How are industry-operating differences reflected in a firm’s financial statements? week 6 Assignment
In short, it measures the risk in each set of stocks. *Variance - Variance measures the variability (volatility) from an average. Volatility is a measure of risk, so this statistic can help determine the risk an investor might take on when purchasing a specific security. Based on the computation of standard deviation & Variance, California R.E.I.T., and Brown Group, Inc. had almost the same amount of risk. But California R.E.I.T.
Debt to assets ratio $1,202,134 (total debt) / $1,404,726 (total assets) = 87.4% B.) ROA is a measure of profitability or effectiveness of resource usage calculated by expressing a company’s net income as a percentage of total assets. As for Sepracor, its ROA is 4.5%. This means that Sepracor created 4.5 cents of earnings from each dollar of assets. The ROE for Sepracor is 33.07%, which means that 33.07 cents of assets are created for each dollar that was originally invested.
Common Stockholder's Equity) | | | | 8.46% | 2,430,872 ÷ (29,946,92 + 27,517,328 ÷ 2) 28,732,160 = 0.84604568 or 8.46 | Solvency Ratios A formulation used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. The formula is calculated by adding short-term and long-term debt and
reliability of measurements. : 4 5 of 5 Question 9. Question : (TCO 5) A voluntary change in accounting principle is accounted for by: a cumulative effect on income in the year of the change. a retrospective reporting of all comparative financial statements shown. a prior period adjustment.
dividends received. : 4 5 of 5 Question 13. Question : (TCO 4) Which is a shareholders’ equity account in the balance sheet? Accumulated depreciation Paid-in capital Dividends payable Marketable securities : 3 5 of 5 Question 14. Question : (TCO 4) Which of the following groups is not among the external users for whom financial statements are prepared?
5. Why is the market capitalization different than the common stockholders’ equity? 6. Comment on the trend in the dividend payout. J.
Cash transactions from op, fin and inv o Were any stock options exercised? In which financial statement did you find this information? What are the components of this financial statement? Using the Statement of Cash Flow we can see that proceeds from the exercise of stock options totaled $1,826,816. The components of the statement of cash flow shows how changes in balance sheet and income accounts affect cash and cash equivalents, and breaks the analysis down into operating, investing, and financing activities.
12) The term ___ means that a currency’s value is determined by the forces of supply and demand. 11) The World Bank is also known as the ________ CHAPTER 5: INTERNATIONAL MONETARY SYSTEM 3) Which country was the first to adopt the gold standard? 13) ________ are those that bear significant risk of not being repaid. 4) __________ is the price of one currency in terms of a second currency. 14) What is the primary purpose of the IFC?
Since we do not have the data for historical volatility and estimating an average from the graph would not be particularly reliable, we can use the long-term (2+ year) call option prices provided in Exhibit 5 to reverse-engineer the volatility. Call option price Period until expiry Strike price Risk-free rate (approximation) Volatility (reverse-calculated using B-S model) 5.04 2 years, 1 month 18 0.27% 29.4% 1.52 2 years, 1 month 25 0.27% 23.4% 1.02 2 years, 1 month 27 0.27% 22.8% Average volatility 25.2% In order to improve accuracy we have taken an average of the three figures which is 25.2%. This is the annualized volatility for the period of just over 2 years. Since we do not have any other information, this will be our best estimate for the annualized volatility over 5 years. Using Black-Scholes calculator, we then get the call option price Ct = $3.93.