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26 Feb 2019

here are the alphas and betas for intel and conagra for the 60 months ending april 2009. alpha is expressed as a percent per month. explain how these estimates would be used to calculate an abnormal return.

Alpha Beta

Intel

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Patrina Schowalter
Patrina SchowalterLv2
28 Feb 2019

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  1. RON Ltd has the following capital structure components.

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Stock question please

Go to finance.yahoo.com/stock-center, choose 5 different stocks and using their symbols click on “Search Finance.”

a. What is the average daily trading volume (Avg Vol)? What is the market capitalization of the firm? What is its price-earnings ratio (P/E)? What is the amount of dividends paid, if any, and what is the dividend yield (Div & Yield)? What is the firm’s beta?

Go to the bottom of the stock price chart and retrieve the end-of-month stock price of Intel over the last 12 months. Record this information in an Excel spreadsheet and estimate the standard deviation of the stock’s price movements. Repeat the process for all 5 stocks. Which stock does your analysis show to be riskier? Assume that the expected return on these stocks is 0 percent for the next month. Use the value-at-risk method to determine the maximum expected loss of these stocks for the next month, based on a 95 percent confidence level.

Your company has approximately $500,000 to invest in a project and has narrowed their selection down to the following three projects. The hurdle rate (WACC) used by the company is 15%. For purposes of payback analysis, assume that the payouts on each project flow evenly in the year of the payout. Project Alpha requires a $480,000 investment and will pay $240,000 at the end of each of the first four years, and then the project will be scrapped. Project Beta requires a $420,000 investment, and will pay $125,000 out in each of the ten years, and then will be scrapped. Project Gamma requires a $470,000 investment, but takes seven years to begin generating profits. It will generate $450,000 per year in years 7 through 9, and $950,000 in year 10. After year 10, this project will also be scrapped.

State dollar answers to the nearest whole dollar. For percentage answers, drop the % sign and round to one decimal place.

Question 8 3 pts

What is the MIRR of Alpha?

Question 10 3 pts

What is the MIRR of Gamma?

Question 13 3 pts

In what month is payback achieved for Gamma? (i.e. 3 yrs and 2 months would be in month 38)

Question 14 3 pts

In what month is discounted payback achieved for Alpha? (i.e. 3 yrs and 2 months would be in month 38)

Question 15 3 pts

In what month is discounted payback achieved for Beta? (i.e. 3 yrs and 2 months would be in month 38)

Question 16 3 pts

In what month is discounted payback achieved for Gamma? (i.e. 3 yrs and 2 months would be in month 38)

Question 20 6 pts

What is the crossover point for Project Alpha and Project Beta?

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