Amazon PLC has invested $550000 in assets. There are 50000 shares outstanding. The par value per share is $10. It earns a rate of 20% on its investment and has a policy of retaining 30% of the earnings. The appropriate discount rate of the firm is 14%. The United states economy has 4 equally likely states of outcomes Depression Recession Normal and Boom in 2020. Amazon PLC expect that the following returns would be made in the states of Outcomes respectively -20 %10% 30% and 50%. In 2021 the states of outcomes changes to change to 0.1, 0.2, 0.6 and 0.1 respectively for Amazon PLC

what be the expected return for Amazon PLC?

calculate the riskiness of Amazon PLC throughout the economy states for 2021

Calculate and illustrate the normal distribution of Amazon's risk

Discuss leverage and its effect of on CML of Amazon PLC

Given Amazon CML, discuss and justify the relevant measure of risk for Amazon PLC

Explain why the set of points between the risk-free asset and a portfolio on the Markowitz efficient frontier is a straight line

Amazon PLC borrowed a loan of sh.50M at 15% fixed interest rate for a 4 year period. Alphabet PLC borrowed a loan of sh.50M for 4 years with a floating interest rate based on the 91 TB rate as follows:

Years91 TB rate

16.5%

210%

316.6%

420%

Required:compute the interest rate swap of Alphabet PLC andAmazon PLC