A firm has 200 shareholders, you among them. Each shareholder owns $20 worth of stock. In addition, Mr. Hostile owns 50 shares (for a firm total of 250 shares) and is trying to fire the management. In an attempt to buy him off, management has offered to buy Mr. Hostiles shares for $28. What will the new share price be?

12.The stock of Static Corporation has a beta of 0.7. If the expected return on the market increases by 6%, the expected return on Static Corporation should increase by?

14.A firm currently pays a dividend of $0.10 a share. The dividend is expected to grow at the rate of 16% for the next five years before slowing to a constant growth rate of 5% indefinitely. If you require an 18% return on this firm's stock, what is the maximum price you would pay for it?

15.Blake has borrowed $30,000 on a 3-year note to buy a car. The loan requires equal monthly payments of principal and interest, with the first payment due one month after the loan is signed. The quoted interest rate is 7%. What will Blake's monthly payments be? Round your answer to the nearest dollar

16.Calculate the monthly payment due on a 30 -year, fixed-rate, $250,000 mortgage if the quoted interest rate is 4.8%.

17.A $50,000, level-coupon Eurobond has a 6% coupon and matures in ten years. At what price should the bond sell today if the prevailing interest rate is 8% per annum? Round your answer to the nearest dollar.

18.A financial advisor says she has an investment that will pay you $500 a month forever. It will cost you $25,000 today. What effective annual rate (EAR) will you earn on this investment?

19.If you make an investment that earns 10% the first year, -5% the second year, -2% the third year, and 12% the fourth year, what is your total 4 -year return?

20.If you make an investment that earns 10% the first year and loses 10% the second year, what is your total 2-year return?

Answer rating: 100% (QA)

The current market value of the firms shares is 20share 200 shares 4000 If Mr Hostile sells his 50 shares for 28 each he would receive 28share 50 shares 1400 Subtracting this from the total market val... View the full answer