- Based on the data below , estimate which of the following investments you expect to lose the most in the event of the general market declined by 10%?

(a) A RM2,000 investment in A firm,

(b) a RM1,500 investment in B firm, or

(c) a RM1,000 investment in C firm.

Please also show your calculation for justifying your decision.

Beta (β) of A = 0.33

Beta (β) of B = 0.95

Beta (β) of C = 1,62

- You have RM200,000 to invest in portfolio contains A shares and B shares. You wanted to create portfolio which would have a return of 25%. If the stock A has expected return of 28% and B share has a return of 18%, how much money you would invest in B share. Assuming beta for A is 0.8 and B beta is 1.

- Assuming the risk-free rate is 5% and the market rate is 15%. Assuming Sugar Corporation share is trading at 60 dollar. Within a year, the share price would rise to 75 dollar and its dividend yield is 5%. What is the expected beta for Sugar Co. for it to rise to that level?

- What key advantages and disadvantages are associated with holding companies? What is pyramiding and what are its consequences?

- ABC CO. is considering the acquisition of DEF CO. at a cash price of RM1.5 million. DEF CO. has short-term liabilities of $500,000. As a result of acquiring DEF., ABC would acquire the copyrights of a national best-seller which would provide an estimated cash flow of $300,000 for the next five years. The firm has a cost of capital of 20 percent. What is the approximate net present value of this acquisition?

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