Other
INV2601 Assignment 1 S2 2022
- Course
- Institution
100% trusted and pass rate
[Show more]
Seller
Follow
Monnas123
Reviews received
Content preview
Share Sahara Limited Kalahari Limited Market Index15.60% 9.40% 4.20%
Standard deviation
Correlation coefficient with 0.38 0.75 1.00
the market index
Estimated return for the next 12.10% 15.50% 12%
year
Assume a risk-free rate of 8% and a return on the market index of 12%.
Calculate the beta coefficient of both shares.
a.
0.38 0.75
b.
0.38 1.68
c.
1.41 0.75
d.
1.41 1.68
Question 2
Question text
Return on the market portfolio 8%
Return on equity 15%
Beta 1.2
Risk-free rate of return 5%
Current earnings per share R3.20
Current dividends per share R1.76
,Calculate the market premium for Deal Corporation.
a.
3%
b.
5%
c.
4%
d.
8%
Question 3
Question text
Which of the following are characteristics of well-functioning markets?
a) Prices take time to adjust to new information.
b) Transactions can be concluded at low costs.
c) The assets can be bought and sold slowly at prices that are far from the previous
transactions.
d) Prices change greatly from one transaction to the next unless substantial new
information becomes available.
e) The participants must be able to timeously and accurately determine the volume
and prices of past transactions and all current bids and offers.
a.
a and c
b.
b and e
c.
c and d
, d.
d and a
Question 4
Question text
Return on the market portfolio 8%
Return on equity 15%
Beta 1.2
Risk-free rate of return 5%
Current earnings per share R3.20
Current dividends per share R1.76
Calculate the value of Deal Corporation based on the constant growth model.
a.
R95.14
b.
R101.56
c.
R502.86
d.
R544.34
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Monnas123. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.68. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
85169 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now