IBM Stock

By walking you through a set of financial data for IBM, this task will help you better understand how theoretical stock prices are calculated; and how prices may react to market forces such as risk and interest rates. You will use both the CAPM and the Constant Growth Model (CGM) to arrive at IBM's stock price. To get started, complete the following steps. 1. Find an estimate of the risk-free rate of interest, krf. To obtain this value, go to Bloomberg.com: Market Data [http://www.bloomberg.com/markets/index.html] and use the "U.S. 10-year Treasury" bond rate as the risk-free rate. In addition, you also need a value for the market risk premium. Use an assumed market risk premium of 7.5%. ... click for more

calculating present value

Given the attached information ... For the discount rates of 4% and 7%, 1. Find the formula for and compute the present value (in 2004 dollars) of the cost of the Exxon Valdez spill. 2. Suppose that Exxon could have adopted stricter rules to ensure a rested crew and a sober master at the beginning of 1989. Enforcing these rules would have cost Exxon P dollars every subsequent year in the future, and the crash wouldn't have happened. If Exxon could have estimated the cost of the spill in 1989, how much would they have been willing to pay each year to avoid a crash? *** YOU DO NOT REQUIRE INFLATION INDEX FOR 2004. THE QUESTION JUST ASKS TO FIND PRESENT VALUE (IN 2004 DOLLAR) USING... click for more

Calculating Returns on Stocks

I have a set of monthly stock performance figures. I have to calculate the % return for each month. Here is an example of my data: Jul 04 - 19.09 Jun 04 - 19.06 May 04 - 17.95 Apr 04 - 14.22 Mar 04 - 14.14 To determine the % return for Jul 04 would I take (19.09 - 19.06)/19.06 to come up with .62%? Would I then take the same formula for each month needed? Also, I have a close figure and an adjusted close figure. I know I need to use the adjusted close figure, but what is the difference between the two? Thanks

Calculating Beta for series of data

Attached is 36 months of stock performance for Apple, DJIA and 10 year treasury notes. According to my instructor I am to determine % returns for all. Then take RI-RF (Apple returns - 10 year treasury returns) and RM - RF (Index returns - 10 year treasury returns). Once I determine these two columns (ri-rf & rm-rf) I can calculate the beta within excel. However, when I do this I come up with a negative beta which is highly unlikely. The question I need to answer for is "What is Apple's beta given the 36-month data specified for this project? I have attached the worksheet with the 36 months of data for Apple, DJIA and 10 year treasury note. I do not want the answers, I just need help... click for more

Personal Finance (check homework)

My course book is: Personal Finance The McGraw-Hill Companies Copyright 1999 Volume 1 of 3, volume 2 of 3, Volume 3 of 3 1. The main cause of inflation is: ____a. an increase in supply with a decrease in wages. __x_b. an increase in demand without a comparable increase in supply. ____c. high interest rates coupled with an increase in unemployment ____d. the high cost of housing, energy, and transportation 2. Using a personal balance sheet, which one of the following by itself would indicate an improved financial position? ____a. A decrease in assets _x__b. An Increase in net worth ____c. An increase in liabilities ____d. An increase in assets 3. Regarding a ... click for more