Lucy has $900,000 to invest and she wants a portfolio beta of

Lucy has $900,000 to invest and she wants a portfolio beta of 1.2. The S&P 500 has an expected return of 18% and the standard deviation is 30%. The risk-free return is 5%. She plans to put her money in the S&P 500 and T-bills. What is the expected return (in %) and standard deviation of her portfolio?

The new credit manager of Kay’s department store plans to

The new credit manager of Kay’s department store plans to liberalize the firm’s credit policy. The firm currently generates credit sales of $575,000 annually. The more lenient credit policy is expected to produce credit sales of $750,000. The bad debt losses on additional sales are projected to be 5% despite an additional $15,000 collection expenditure. The new manager anticipates production and selling costs other than additional bad debt and collection expense will remain at the 85% level. The firm is in the 34% tax bracket.,A. If the firm maintains its receivables turnover of 10times, how much will the receivables balance increase?,B. What would be Kay’s incremental after-tax return on investment?,C. Assuming additional inventory of $35,000 is required to support the additional sales compute the after-tax return on investment?,

The required rate of returns you need in calculating your SML

The required rate of returns you need in calculating your SML this week is the same required rate of return on your portfolio in week 4. Based on section 8.3 in your textbook, rm is your required rate of return on your portfolio. This will be the required rate of return you calculated using your week 4 excel and that is what you needed to use in your calculations for all of your four stocks. For example, if the required rate of return on your portfolio from week 4 is 25% and the risk free rate is 3% (given). Then the risk premium on all your 4 stocks = 25 – 3 = 22. This will be the same for all of your 4 stocks.,,,The formula you need to use for your SML is 8-8 on page 273 of your textbook. SML Equation:,,ri = rRF + (RPm) bi,

Hi Sarah,please can u answer this question?Digby’s balance

Hi Sarah,,please can u answer this question?,Digby’s balance sheet has $97,041,000 in equity. Further, the company is expecting net income of 3,000,000 next year, and also expecting to issue $4,000,000 in new stock. If there are no dividends paid what will beDigby’s book value?,,I’m having trouble to come up with an aswer.,Thanks