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Portfolio Management – What are the mean returns and risk of a portfolio if the investment manager invests

Consider the following information about three assets:
Stock                                 Mean Return                                 Standard Deviation
Moose                                   10.00%                                               5.20%
Gnu                                        8.00%                                                 2.70%
Wildebeest                           12.00%                                               6.50%
a) What are the mean returns and risk of a portfolio if the investment manager invests in:
i. 25% in Moose and 75% in Gnu if the correlation between Moose & Gnu is 0.2?
ii...

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Principles of Financial Investments – Maple Plc has never paid a dividend, however it has just announced that it will pay an annual dividend

Question 1

Maple Plc has never paid a dividend, however it has just announced that it will pay an annual dividend of 5p next year, 8p the year after and 10p the year after that. From then on the firm expects dividends to grow at 4% per year.

Earnings per share next year will be 8p. The firm has 10 million shares currently in issue and beta of the firm’s shares is 1.5. The current riskless rate in the economy is 3% and the expected return on the stock market is 10%.

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Order Now – AllAssignmentHelp

a) Calculate the expected return (i.e. cost of capital) for equity holders in Maple Plc.
b) What will the plow back ratio of the firm be next year?
c) Calculate the current share price of the firm.
d) If an investor had bought the share for £1...

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The following trial balance was extracted from the books of Challenor Limited

The following trial balance was extracted from the books of Challenor Limited on 31.3.2012.

Financial Accounting Foundations

Financial Accounting Foundations

At t...

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