Economics Homework Help

I’m looking for professional finance tutor I want to get full mark I will give you a great tip for that . I have 5 problems >there are problem 6 ,7,8,9and 10 for each problem 10$ all it will be 50$.

roblem Sets 6 and 7 are available, and are due before 11:50 PM on Friday, September 24.

Problem Set 6 is intended to be simple — just look of the data from online resources for the first problem, and then for the second problem calculate the required rate of return for each of the three stocks using the Beta (from the first problem) and the Capital Asset Pricing Model or CAPM. It’s always best to pick firms that are profitable for my assignments. We are using the 10-year Treasury bond YTM (Yahoo lists it as “Last Price” even through it’s the YTM) as the risk-free rate or r_F. The basic jest of the calculation is that you multiply the firm’s Beta by the market risk premium [r_M-r_F] and then add the r_F to this result. The market risk premium [r_M-r_F] is the extra or premium return that the market expects on an overall market index r_M of stocks (such as the S&P 500 index) over the risk-free rate. I define the market risk premium [r_M-r_F] as 5.5% for this assignment.

I always see common errors with regard to the CAPM calculations. For example if r_F=2%, MRP=5.5%, and Beta = 1.25 it is not unusual to see the following: r_i = 2 + (1.25)(0.055) = 2.06875 or r_i = 0.02 + (1.25)(0.055 – 0.02) = 0.06375. Both of these are very incorrect, and the for the latter the [0.055 – 0.02] is multiplying the Beta by [r_M-r_F-r_F] — never subtract anything from the market risk premium [r_M-r_F]. The correct solution here would be r_i = 0.02 + (1.25)(0.055) = 0.08875 or 8.875%.

Value Line (VL) does not report the interest coverage ratio for every firm under Capital Structure. First the firm must have positive EBIT, and it is only there for firms that have debt where the coverage ratio is deemed to be meaningful (under some ratio figure around 75x, unsure about their cut-off). Sometimes it’s actually missing when it should be listed. If you obtain the coverage ratio from Yahoo data then under the Financials for the firm take the Operating Income (they don’t refer to it as EBIT any longer) and divide it by the Interest Expense for the most recent year listed. If a firm has EBIT of $500 million and interest expense of $100 million then the interest coverage ratio would be $500M/$100M = 5x. An interest coverage ratio is meaningless if the EBIT is negative, so VL won’t report that.

My file “Chapter 11 examples for in class” addresses the four main topic areas of Chapter 11, which otherwise seems like a long chapter, but in reality is broken down into just these four primary topics. This file thus addresses the tools needed for Problem Set 7. If you have any questions regarding either of these two assignments then please do email me with your questions. You should take your time and carefully work through the problems of Problem Set 7 since the chapter (along with Chapter 12 next week which is an extension of chapter 11) because the concepts are very important and chapter 11 also has the most weight of any other chapter on the final .