Question: You are analyzing a spreadsheet where an analyst calculated the NPV, IRR, and Payback period. The results were: NPV = -$120,000. IRR = 8%, Payback
You are analyzing a spreadsheet where an analyst calculated the NPV, IRR, and Payback period. The results were: NPV = -$120,000. IRR = 8%, Payback period = 4 years. You uncovered that the analyst inputted 2.75 for the company stock's beta instead of 0.75. Correcting this error will
Group of answer choices
a) Increase IRR; leaving others unaffected
b) Increase NPV; leaving others unaffected
c) Decrease payback period; leaving others unaffected
d) Increase both IRR and NPV; leaving payback period unaffected.
You bought a stock for $100 a share. Right now the stock price is $110, and you still want to hold on the stock. However, you call your broker and instruct the stock to be sold if the share prices go up to $120 or more. What trading order did you give to your broker?
Group of answer choices
1) market sell at $120
2) stop loss at $120
3) stop buy $120
4) limit sell at $120
Aldabra's stock sells for $40, its next expected dividend is $1.82, and its expected constant growth rate of dividends is 6.25%. Assuming that the stock is in equilibrium, what is the expected rate of return?
Group of answer choices
a) 11.2%
b) 9.7%
c) 10.8%
d) 12.5%
Fast Exports Inc. has a beta of 1.2, market risk-premium is 7%, and Treasury bonds are currently yielding 5%. Calculate the cost of equity capital using the CAPM approach.
Group of answer choices
1) 11.7%
2) 14.4%
3) 12.6%
4) 13.4%
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