You know that the return of Crane Cyclicals common shares is 1.1 times as sensitive to...
You know that the return of Crane Cyclicals common shares is 1.1 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 3.50 percent and market risk premium is 5.71 percent, what is Crane Cyclicals’ cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.g. 1.25140 and final answer to 2 decimal places, e.g. 15.25%.) Cost of common equity capital enter the Cost of common equity capital in percentages rounded to 2 decimal places %
Homework Answers
Current cost of equity =Risk free rate+beta*risk premium
Current cost of equity =3.5%+1.1*5.71%
Current cost of equity =9.78%
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You know that the return of Crane Cyclicals common shares is 1.1
times as sensitive to...
You know that the return of Blossom Cyclicals common shares is 0.9 times as sensitive to...
You know that the return of Blossom Cyclicals common shares is 0.9 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 2.05 percent and market risk premium is 5.71 percent, what is Blossom Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.8. 1.25140 and final answer to 2 decimal places, e-8. 15.25%) Cost of common equity capital
You know that the return of Pharoah Cyclicals common shares is 1.8 times as sensitive to...
You know that the return of Pharoah Cyclicals common shares is 1.8 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 3.05 percent and market risk premium is 5.71 percent, what is Pharoah Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.g. 1.25140 and final answer to 2 decimal places, e.g. 15.25%.) Cost of common equity capital 16.38 Ivanhoe Wok Co. is expected to pay...
X Your answer is incorrect. You know that the return of Wildhorse Cyclicals common shares is...
X Your answer is incorrect. You know that the return of Wildhorse Cyclicals common shares is 1.0 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 3.70 percent and market risk premium is 5.71 percent, what is Wildhorse Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.g. 1.25140 and final answer to 2 decimal places, e.g. 15.25%.) Cost of common equity capital
The Rhaegel Corporation's common stock has a beta of 1.1. If the risk-free rate is 5.1...
The Rhaegel Corporation's common stock has a beta of 1.1. If the risk-free rate is 5.1 percent and the expected return on the market is 13 percent, what is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) Cost of equity capital
Crane Inc.’s common shares currently sell for $32 each. The firm’s management believes that its shares...
Crane Inc.’s common shares currently sell for $32 each. The firm’s management believes that its shares should really sell for $45 each. The firm just paid an annual dividend of $2 per share and management expects those dividends to increase by 8 percent per year forever (and this is common knowledge to the market). What does management believe is the correct cost of common equity for the firm? (Round final answer to 2 decimal places, e.g. 15.25%.)
The Rhaegel Corporation's common stock has a beta of 1.3. If the risk-free rate is 5.3 percent and the expected return...
The Rhaegel Corporation's common stock has a beta of 1.3. If the risk-free rate is 5.3 percent and the expected return on the market is 11 percent, what is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity capital
Exercise 11-20 a-c Crane Company has $1,140,000 in assets and $1,140,000 in stockholders’ equity, with 36,600...
Exercise 11-20 a-c
Crane Company has $1,140,000 in assets and $1,140,000 in
stockholders’ equity, with 36,600 shares outstanding the entire
year. It has a return on assets of 15%. During 2021, it had net
income of $171,000. On January 1, 2022, it issued $397,000 in debt
at 6% and immediately repurchased 18,300 shares for $397,000.
Management expected that, had it not issued the debt, it would have
had net income of $171,000 in 2022.
Determine the company’s net income and...
Crane Industries common stock has a beta of 1.5. If the market risk-free rate is 3.6...
Crane Industries common stock has a beta of 1.5. If the market risk-free rate is 3.6 percent and the expected return on the market is 8.0 percent, what is Crane’s cost of common stock? (Round answer to 1 decimal places, e.g. 15.2%.) Cost of common stock____%
The Rhaegel Corporation’s common stock has a beta of 1.07. If the risk-free rate is 3.5 percent and the expected return...
The Rhaegel Corporation’s common stock has a beta of 1.07. If the risk-free rate is 3.5 percent and the expected return on the market is 10 percent, what is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Assume the expected return on the market is 14 percent and the risk-free rate is 4...
Assume the expected return on the market is 14 percent and the risk-free rate is 4 percent. What is the expected return for a stock with a beta equal to 1.20? (Round answers to 2 decimal places, e.g. 15.25.) Expected return ____________ What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.) Market risk premium _______________
You know that the return of Blossom Cyclicals common shares is 0.9 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 2.05 percent and market risk premium is 5.71 percent, what is Blossom Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.8. 1.25140 and final answer to 2 decimal places, e-8. 15.25%) Cost of common equity capital
You know that the return of Pharoah Cyclicals common shares is 1.8 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 3.05 percent and market risk premium is 5.71 percent, what is Pharoah Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.g. 1.25140 and final answer to 2 decimal places, e.g. 15.25%.) Cost of common equity capital 16.38 Ivanhoe Wok Co. is expected to pay...
X Your answer is incorrect. You know that the return of Wildhorse Cyclicals common shares is 1.0 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 3.70 percent and market risk premium is 5.71 percent, what is Wildhorse Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.g. 1.25140 and final answer to 2 decimal places, e.g. 15.25%.) Cost of common equity capital
The Rhaegel Corporation's common stock has a beta of 1.1. If the risk-free rate is 5.1 percent and the expected return on the market is 13 percent, what is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) Cost of equity capital
The Rhaegel Corporation's common stock has a beta of 1.3. If the risk-free rate is 5.3 percent and the expected return on the market is 11 percent, what is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity capital
Exercise 11-20 a-c
Crane Company has $1,140,000 in assets and $1,140,000 in
stockholders’ equity, with 36,600 shares outstanding the entire
year. It has a return on assets of 15%. During 2021, it had net
income of $171,000. On January 1, 2022, it issued $397,000 in debt
at 6% and immediately repurchased 18,300 shares for $397,000.
Management expected that, had it not issued the debt, it would have
had net income of $171,000 in 2022.
Determine the company’s net income and...
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