Please give me solution and pick from multiple choice Using the following returns, calculate the average...

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Finance

Please give me solution and pick from multiple choice
Using the following returns, calculate the average returns forAbundant and Slim.
Returns (%)
Year
Abundant
Slim
2006
8
15
2007
5
-4
2008
-6
-9
2009
7
11
2010
12
6
2011
9
10
a.
The average return for Share Abundant is 5.83% and 4.83% forShare Slim.
b.
The average return for Share Abundant is 5.4% and 2.8% for ShareSlim.
c.
The average return for Share Abundant is 5.5% and 4.5% for ShareSlim.
d.
The average return for Share Abundant is 4.83% and 5.83% forShare Slim.
Summit Systems will pay a dividend of $1.50 next year. If youexpect Summit’s dividend to grow by 6% per year, what is its priceper share if the required return of equity is 11%?
a.
The price per share is $25.
b.
The price per share is $31.80.
c.
The price per share is $13.63.
d.
The price per share is $30.
Pfd Company has debt with a yield to maturity of 7%, a cost ofequity of 13% and a cost of preference stock of 9%. The marketvalues of its debt, preference stock and equity are $13 million, $3million and $15 million, respectively, and its tax rate is 35%.What is this firm’s WACC?
a.
The WACC (adjusted for tax) is 9.07%.
b.
The WACC (adjusted for tax) is 8.42%.
c.
The WACC (adjusted for tax) is 10.10%.
d.
The WACC (adjusted for tax) is 9.79%.

Answer & Explanation Solved by verified expert

4.1 Ratings (519 Votes)

1 Average return of Abundant 85671296 583 Average return of Slim 1549116106 483 Hence correct option is a The average return for Share Abundant See Answer

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Please give me solution and pick from multiple choiceUsing the following returns, calculate the average returns forAbundant and Slim.Returns (%)YearAbundantSlim200681520075-42008-6-9200971120101262011910a.The average return for Share Abundant is 5.83% and 4.83% forShare Slim.b.The average return for Share Abundant is 5.4% and 2.8% for ShareSlim.c.The average return for Share Abundant is 5.5% and 4.5% for ShareSlim.d.The average return for Share Abundant is 4.83% and 5.83% forShare Slim.Summit Systems will pay a dividend of $1.50 next year. If youexpect Summit’s dividend to grow by 6% per year, what is its priceper share if the required return of equity is 11%?a.The price per share is $25.b.The price per share is $31.80.c.The price per share is $13.63.d.The price per share is $30.Pfd Company has debt with a yield to maturity of 7%, a cost ofequity of 13% and a cost of preference stock of 9%. The marketvalues of its debt, preference stock and equity are $13 million, $3million and $15 million, respectively, and its tax rate is 35%.What is this firm’s WACC? a.The WACC (adjusted for tax) is 9.07%.b.The WACC (adjusted for tax) is 8.42%.c.The WACC (adjusted for tax) is 10.10%.d.The WACC (adjusted for tax) is 9.79%.

	Returns (%)
Year	Abundant	Slim
2006	8	15
2007	5	-4
2008	-6	-9
2009	7	11
2010	12	6
2011	9	10

	a.	The average return for Share Abundant is 5.83% and 4.83% forShare Slim.
	b.	The average return for Share Abundant is 5.4% and 2.8% for ShareSlim.
	c.	The average return for Share Abundant is 5.5% and 4.5% for ShareSlim.
	d.	The average return for Share Abundant is 4.83% and 5.83% forShare Slim.

	a.	The price per share is $25.
	b.	The price per share is $31.80.
	c.	The price per share is $13.63.
	d.	The price per share is $30.

	a.	The WACC (adjusted for tax) is 9.07%.
	b.	The WACC (adjusted for tax) is 8.42%.
	c.	The WACC (adjusted for tax) is 10.10%.
	d.	The WACC (adjusted for tax) is 9.79%.