The beta of Middle Earth Inc. stock is 1.6, and the risk-free rate of return is 8 percent. If the expected return on the stock market is 15 percent, then what is the expected rate of return on Middle Earth Inc. stock?
Gimli purchased a share of stock for $22 one year ago. During the time he owned the stock it paid $.97 in dividends. He just sold the stock for $25.30, what was his holding period of return?
Security analysts have evaluated Orc Industries and determined that there is a 15% chance that the firm will generate earnings per share of $2.40 next year; a 60% chance that the firm will generate earnings of $3.10 per share; and a 25% chance that the firm will generate earnings of $3.80 per share. What are the expected earnings per share for Orc Industries? (Round to the nearest $.01)
You are analyzing a project and estimate that it has the following potential return scenarios:
What is the expected rate of return on this project? (rounded to the nearest tenth of a percent)
C. some other amount.
What is the expected rate of return of Tolkien Industries stock given the risk free rate of return is 3% and the market rate of return is 11%. The company has a historical beta of .80.
Dwarf Brothers stock was priced at $15 per share two years ago when purchased. It now sells for $18 per share. In the last year the stock paid $1.00 per share in dividends. What was the total return for owning Dwarf Brothers stock? (Round to the nearest percent).
Which stock has the greater variation in price? Stock A, has a standard deviation of 4; Stock B, which has a standard deviation of 6; Stock C which has a standard deviation of 5.
A. Stock C
B. Stock B
C. Can’t tell with the information given.
D. Stock A