Question 2 Question 3 Question 4 Question 5 Title Page Question 1 FINC 3116 Financial Management ! Assignment 2 Grade Name Student Number Enter Name Enter 7 Dior Student Number beginning with Disco Enter Answer Enter Answer Enter Answer Enter Answer Question 1 Richard's investment in each stock Richard's Expected Value Richard's Portfolio Standard Deviation Question 2 The beta of J Corp's stock is The expected return on J Corp's stock is Question 3 J Corp's WACC is Question 4 The Expected Operating CF are The IRR for the factory is The NPV of the factory is Should J Corp build the factory? Question 5 The beta of Richard's portfolio is Richard's portfolio is Enter Answer Enter Answer Enter Answer Enter Answer Enter Answer Enter Answer Enter Answer Title Page Question 1 Question 2 Question 3 Question 4 Question 5 Question 1 (4 Marks) Richard must decide how to allocate the capital in his portfolio Richard has available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock Enter Answer a) HC 11 Enter Answers b) The expected return of Richard's porfolio 02 Mar Round your awer one che percent c) The standard deviation of Richard's portfolio return is Mbound your answer to recente per Year Shock AM) Sock, BSK Back Enter Answers weer 1 . Question 4 Question 5 Title Page Question 1 Question 2 Question 3 Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible project . In order to assess the viability of the project, Anna must first calculate the rate of return that equity holders expect from the company stock. The annual returns for J Corp. and for a market index are given below. Currently, the risk-free rate of return is and the market risk.premium is Enter Answer Enter Answer a) What is the beta of J Corp.'s stock? (1 Mark Round your answer to two decimal places b) Using the CAPM model, what is the expected Hate of return on J Corp. stock for the coming year? 12 Mars RC Corp Year Return (5) Rolumn (5) 1 2 3 4 Enter your Foal Answer Here 0 7 8 10 11 Complete vpur road worn Question 5 Title Page Question 1 Question 2 Question 3 Question 4 Question 3 (3 Marks) Refer to Question 2. Now that Anna has determined an appropriate rate of return for J Corp.'s stock, she must calculate the firm's Weighted Average Cost of Capital (WACC). There are currently Million J Corp.common shares outstanding. Each share is currently priced at As well, the firm has bonds outstanding and each bond has a face value of $10,000, a yield to maturity of and a quoted price of J Corp.'s tax rate is 30% J Corp. has no preferred shares outstanding. What is J Corp.'s WACC? Enter Answer (Round your answer to one one hundredth of a percent) For your Answer Complete your own work in the space below + Title Page Question 1 Question 2 Question 3 Question 4 Question 5 Question 4 (5 Marks) Refer to Questions 2 and 3. The land for the factory will cost The factory will cost to build and construction will take two years with construction costs payable in equal installments at the start of each year. The factory will operate for 20 years. At the end of its 20 year fospan the land can be resold for There is a 70% probability that the factory's nest operating cash flows will be however, there is a 30% chance that net cash flows will only be You may assume that net operating cash flows are received at the end of each year Entor Answer Enter Ansvar a) What are the expected net operating cash flows per year? 11 Marved your www2 decimen b) What is the internal Rate of Return for the project? Marsund you can c) What is the Net Present Value of the project? Indya d) Should Anna recommend that the Corporation build the factory? Entor Answer Yes No Check Question 4 Question 5 Title Page Question 1 Question 2 Question 3 Question 5 (5 Marks) Refer to Questions 1 and 2. Richard has just received an unexpected bonus at work worth and, given the J. Corp.'s reputation for excellent investment decision making, he will invest all of the bonus in JCorp stock. Given the rates of return for stocks AB.C. and D presented in Question 1 and the rates of return for J Corp. stock and the market presented in Question as well as the cash amounts he is investing in stocks A B C and D as you determined in Question 1 a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer round to be b) Richard's portfolio 2 Mark) Aggressive Defensive Neither } Check only one box Question 2 Question 3 Question 4 Question 5 Title Page Question 1 FINC 3116 Financial Management ! Assignment 2 Grade Name Student Number Enter Name Enter 7 Dior Student Number beginning with Disco Enter Answer Enter Answer Enter Answer Enter Answer Question 1 Richard's investment in each stock Richard's Expected Value Richard's Portfolio Standard Deviation Question 2 The beta of J Corp's stock is The expected return on J Corp's stock is Question 3 J Corp's WACC is Question 4 The Expected Operating CF are The IRR for the factory is The NPV of the factory is Should J Corp build the factory? Question 5 The beta of Richard's portfolio is Richard's portfolio is Enter Answer Enter Answer Enter Answer Enter Answer Enter Answer Enter Answer Enter Answer Title Page Question 1 Question 2 Question 3 Question 4 Question 5 Question 1 (4 Marks) Richard must decide how to allocate the capital in his portfolio Richard has available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock Enter Answer a) HC 11 Enter Answers b) The expected return of Richard's porfolio 02 Mar Round your awer one che percent c) The standard deviation of Richard's portfolio return is Mbound your answer to recente per Year Shock AM) Sock, BSK Back Enter Answers weer 1 . Question 4 Question 5 Title Page Question 1 Question 2 Question 3 Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible project . In order to assess the viability of the project, Anna must first calculate the rate of return that equity holders expect from the company stock. The annual returns for J Corp. and for a market index are given below. Currently, the risk-free rate of return is and the market risk.premium is Enter Answer Enter Answer a) What is the beta of J Corp.'s stock? (1 Mark Round your answer to two decimal places b) Using the CAPM model, what is the expected Hate of return on J Corp. stock for the coming year? 12 Mars RC Corp Year Return (5) Rolumn (5) 1 2 3 4 Enter your Foal Answer Here 0 7 8 10 11 Complete vpur road worn Question 5 Title Page Question 1 Question 2 Question 3 Question 4 Question 3 (3 Marks) Refer to Question 2. Now that Anna has determined an appropriate rate of return for J Corp.'s stock, she must calculate the firm's Weighted Average Cost of Capital (WACC). There are currently Million J Corp.common shares outstanding. Each share is currently priced at As well, the firm has bonds outstanding and each bond has a face value of $10,000, a yield to maturity of and a quoted price of J Corp.'s tax rate is 30% J Corp. has no preferred shares outstanding. What is J Corp.'s WACC? Enter Answer (Round your answer to one one hundredth of a percent) For your Answer Complete your own work in the space below + Title Page Question 1 Question 2 Question 3 Question 4 Question 5 Question 4 (5 Marks) Refer to Questions 2 and 3. The land for the factory will cost The factory will cost to build and construction will take two years with construction costs payable in equal installments at the start of each year. The factory will operate for 20 years. At the end of its 20 year fospan the land can be resold for There is a 70% probability that the factory's nest operating cash flows will be however, there is a 30% chance that net cash flows will only be You may assume that net operating cash flows are received at the end of each year Entor Answer Enter Ansvar a) What are the expected net operating cash flows per year? 11 Marved your www2 decimen b) What is the internal Rate of Return for the project? Marsund you can c) What is the Net Present Value of the project? Indya d) Should Anna recommend that the Corporation build the factory? Entor Answer Yes No Check Question 4 Question 5 Title Page Question 1 Question 2 Question 3 Question 5 (5 Marks) Refer to Questions 1 and 2. Richard has just received an unexpected bonus at work worth and, given the J. Corp.'s reputation for excellent investment decision making, he will invest all of the bonus in JCorp stock. Given the rates of return for stocks AB.C. and D presented in Question 1 and the rates of return for J Corp. stock and the market presented in Question as well as the cash amounts he is investing in stocks A B C and D as you determined in Question 1 a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer round to be b) Richard's portfolio 2 Mark) Aggressive Defensive Neither } Check only one box