Question
please solve it fast ASAp with all requirements Larry is your old, trusted money manager. Currently, Larry manages all your funds. Last year Larry earned
please solve it fast ASAp with all requirements
Larry is your old, trusted money manager. Currently, Larry manages all your funds. Last year Larry earned a return of 12% (=12%). In addition, you also know the following information: =20% =2 ()=7% =9% =2% a. Calculate Larrys Sharpe ratio and Treynor ratio. b. If you want to evaluate Larrys performance, what is the relevant performance measure, and why? ( c. Larrys contract states that at the end of each year he is entitled to a $20,000 annual bonus if he manages the funds efficiently. Does he deserve the bonus for this year? Explain and support your answer with calculations.
Question 6 Ross and Rachel are the equity holders of the all-equity financed company Friends Ltd. (Friends Ltd.). Each one of them holds 50% of Friends Ltd.s shares, and the overall number of outstanding shares of Friends Ltd. is 1,000. Ross and Rachel decided to go on a brake. Following this decision, it was agreed that Friends Ltd. will issue debt and with the proceeds will repurchase some of Rosss shares. Friends Ltd.s annual perpetual EBIT is $2,000. The HIMYM Ltd. company (HIMYM) is also an all-equity financed company, that operates in same field as Friends Ltd. HIMYM has an annual perpetual EBIT of $1,000, and its equity value is $7,000. The corporate tax rate is 30%. a. What is the unlevered value () of Friends Ltd.? b. What is the price per one share of Friends Ltd. before the debt issuance? c. Assume that Friends Ltd. is issuing a perpetual debt of $7,000. These funds will be used to repurchase some of Rosss shares. How many shares will the company buy from Ross? ()
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