Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / 1)Peter is considering investing R100 000 in the following 2 shares: Share B (Beta) % Invested Required Return 9% 11% Market Risk Premium 6% 6% A B 0

1)Peter is considering investing R100 000 in the following 2 shares: Share B (Beta) % Invested Required Return 9% 11% Market Risk Premium 6% 6% A B 0

Finance

1)Peter is considering investing R100 000 in the following 2 shares: Share B (Beta) % Invested Required Return 9% 11% Market Risk Premium 6% 6% A B 0.8 1.1 30% 70% • The risk-free rate is 7%. Required: 1.1 Use the CAPM and find the market return. (2) 1.2 Use the CAPM and find the required return for the portfolio. (2) 1.3 Calculate the portfolio's beta. (1) 1.4 Graphically illustrate the individual security market lines for shares A and B.

2)

need help finding info for KTB (Kontoor Brands Inc)

-- Discuss the company’s recent (last year or two) financial (earnings, margin, ROC) performance.

-- Discuss the firm’s P/E and PEG ratio and what they mean for investors in terms of valuation.

            -- What are the growth expectations for the company and where will growth come from?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

1.

CAPM = RISK FREE RATE + BETA*MARKET RISK PREMIUM

MARKET RISK PREMIUM = EXPECTED MARKET RETURN RATE - RISK FREE RATE

MARKET RETURN RATE = 6% + 7% = 13%.

Required Return for the portfolio = Required Return of A * (% Invested) + Required Return of B * (% Invested)

= 9%*30% + 11%*70%

10.4%

Portfolios Beta ,

10.4%(Expected Return Of Portfolio) = 7%(RiskFreeRate) + Beta*6%(MarketRisk Premium)

beta = (10.4-7)/6 = 0.566

2.Net Income in FY 2019 has reduced from 263 Million to 96 Million , Revenues also reduced from 2.7 billion to 2.5 billion.

P/E ratio is 182.5 and EPS is 0.13 , Price of the equity to Earnings per ratio is on higher side, looks like over valued in terms of valuation point of view. P/E ratio in the range of 15 is fairly valued.

please see the attached file.