Accounting

Question 3 (a) Giant Bhd has isolated four alternatives for meeting its need for increased production capacity. The following table summarizes data gathered relative to each of these alternatives. Alternatives Expected return Standard deviation of return A 20% 7.0% B 22% 9.5% 19% 6.0% D 16% 5.5% Required: (i) Calculate the coefficient of variation for each alternative. (4 marks) (ii) If the firm wishes to minimize risk, which alternative do you recommend? Why? (2 marks) (b) Find the beta for an asset with a required return of 15% when the risk-free rate and market return are 3% and 15%, respectively. (4 marks) (C) Malindo Sdn. reported earnings available to common stock of $4,200,000 last year. From those earnings, the company paid a dividend of $1.26 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 40% debt, 10% preferred stock, and 50% common stock. It is taxed at a rate of 40%