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Chapter 7 _________________________________



MyFinanceLab Solutions



700 600 500 400 300 200 100 0



12/24/2007



12/24/2008



Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________



MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



1400 1200 1000 800 600 400 200 0



12/24/2007



Titman/Keown/Martin Financial Management 11e



12/24/2008



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Chapter 7 _________________________________ MyFinanceLab Solutions



4



Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



14 12 10 8 6 4 2 0



one year ago



Titman/Keown/Martin Financial Management 11e



today



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Chapter 7 _________________________________ MyFinanceLab Solutions



6



Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



20 18 16 14 12 10 8 6 4 2 0



one year ago



Titman/Keown/Martin Financial Management 11e



today



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Chapter 7 _________________________________ MyFinanceLab Solutions



8



Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



20 18 16 14 12 10 8 6 4 2 0



one year ago



Titman/Keown/Martin Financial Management 11e



today



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Time



Asman



Salinas



14 12 10 8 6 4 2 0



Time 1



Titman/Keown/Martin Financial Management 11e



Time 2



Time 3



Time 4



11



Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



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Time 1



Titman/Keown/Martin Financial Management 11e



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Time 3



Time 4



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________ MyFinanceLab Solutions



Probability



Return



60 50 40 30 20 10 0



16



-3%



2%



4%



6%



Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Common Stock A Probability



Common Stock B



Return



70 60 50 40 30 20 10 0



11%



Probability



15%



Return



19%



Titman/Keown/Martin Financial Management 11e



19



Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Time



Caswell



Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Time



Brangus



Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Time



Barris



Titman/Keown/Martin Financial Management 11e



Carson



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Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



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Chapter 7 _________________________________ MyFinanceLab Solutions



Time



34



Value of Barris Stock



Annual Rate of Return



Value of Carson Stock



Annual Rate of Return



Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Barris Company 20 18 16 14 12 10 8 6 4 2 0



Time 1



Time 2



Time 3



Titman/Keown/Martin Financial Management 11e



Carson Company



Time 4



40 36 32 28 24 20 16 12 8 4 0



Time 1



Time 2



Time 3



Time 4



35



Chapter 7 _________________________________ MyFinanceLab Solutions



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Titman/Keown/Martin Financial Management 11e



Chapter 7 _________________________________ MyFinanceLab Solutions



Titman/Keown/Martin Financial Management 11e



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