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All posts in General Questions

What specifically is a hedge fund? Why is it difficult to define hedge funds as a specific asset class?

Should hedge funds be more regulated or is limiting hedge funds to sophisticated investors sufficient?

How would you conduct an attribution analysis of a hedge fund manager? What obstacles currently exist with hedge fund manager performance evaluation.

How would you address hedge funds in a client s investment policy statement?

A) How would the abnormal earnings calculations in Table 8 5 change if the cost of equity assumption is changed to 12%?

B) What will Wal Mart s cost of equity be if the equity market risk premium is 5 percent?

C) Let s change the problem a little and calculate the weighted average cost of capital (WACC):

Assume that Wal Mart changes its capital structure so that its market value weight of debt to capital increases to 20%, and its after tax interest rate on debt at this new leverage level is 4%. Assume that the equity market risk premium is 7%. What will be the cost of equity at the new debt level? What will be the weighted average cost of capital?

Suppose you own a savings account that earned $10 over the past year. Your only transaction in the account has been to withdraw $3 on the last day of this 12 month period. The account bears an interest rate of 4 percent per year.
a) what is the value of the account after the $3 withdrawal?
b) what is the trailing P/E and forward P/E for this account

A share traded at $26 at the end of 2009 with a price to book ratio of 2.0. Analysts are forecasting earnings per share of $2.60 for 2010. The required equity return is 10 percent. What is the growth in residual earnings that the market expects beyond 2010?

A firm with 100 million shares outstanding repurchased 10 million shares to the market price of $20 per share. What is the total market value of the equity after the repurchase? What is the per share value after the repurchase?