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Homework Answers
Required return=risk free rate+beta*(market rate-risk free rate)
13=2+Beta*(9.5-2)
Beta=(13-2)/(9.5-2)
=1.47(Approx).
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The required return on retained earnings is 13%....
Show work and answer correctly for thumbs up! What is the WACC of a company with...
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What is the WACC of a company with the following capitalization. The company is in the 33% tax bracket, and floatation costs add 1.2% from the firm's perspective. Allocation Market Cost/ Expected Return Debt 5.5% 0.3 0.4 9.4% Retained Earnings Common Stock (new issue) 10.6% O 7.69% 08.05% O Not enough information
please complete all parts to the question 4. The cost of retained earnings the required rate...
please complete all parts to the question
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Show work and answer correctly for thumbs up! Which of the following companies has the lowest...
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Which of the following companies has the lowest after tax cost of debt. Company Market Cost of Debt Tax Bracket 10% 0.35 9% 0.2 12% 0.28 OB O A and B oc Ο Α
Show work and answer correctly for thumbs up! NPV ensures that: we generate cash the most...
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NPV ensures that: we generate cash the most efficiently for our investors O we choose the greatest wealth creating opportunity for our investors Owe minimize the time to get wealthy for our investors o we choose the lowest risk opportunity for our investors
5. The cost of retained earnings Aa Aa If a firm cannot invest retained earnings to...
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5. The cost of retained earnings Aa Aa the required rate of If a firm cannot...
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Show work and answer correctly for thumbs up! What is the present value of a $2000,...
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What is the present value of a $2000, 10 year, annual ordinary annuity at a 4% annual discount rate (round to nearest dollar) 1351 18,422 O 16,222 O 249,122
Show work and answer correctly for thumbs up! For an initial investment of $10,000, you are...
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For an initial investment of $10,000, you are offered the opportunity to receive $4,000 at the end of the year for the next 10 years. What is the irr of this opportunity? $16,840 o need to know the cost of capital O 38.45% O 8%
The cost of retained earnings the required rate of If a firm cannot invest retained earnings...
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What is the WACC of a company with the following capitalization. The company is in the 33% tax bracket, and floatation costs add 1.2% from the firm's perspective. Allocation Market Cost/ Expected Return Debt 5.5% 0.3 0.4 9.4% Retained Earnings Common Stock (new issue) 10.6% O 7.69% 08.05% O Not enough information
please complete all parts to the question
4. The cost of retained earnings the required rate of return on retained earnings, it If a firm cannot invest retained earnings to earn a rate of return should return those funds to its stockholders, The cost of equity using the CAPM approach The current risk-free rate of return (TRF) is 4.23% while the market risk premium is 5.75%. The Jefferson Company has a beta of 1.56. Using the capital asset pricing model...
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Show work and answer correctly for thumbs up!
Which of the following companies has the lowest after tax cost of debt. Company Market Cost of Debt Tax Bracket 10% 0.35 9% 0.2 12% 0.28 OB O A and B oc Ο Α
Show work and answer correctly for thumbs up!
NPV ensures that: we generate cash the most efficiently for our investors O we choose the greatest wealth creating opportunity for our investors Owe minimize the time to get wealthy for our investors o we choose the lowest risk opportunity for our investors
5. The cost of retained earnings Aa Aa If a firm cannot invest retained earnings to earn a rate of return the required rate of return on retained earnings, it should return those funds to its stockholders. The cost of equity using the CAPM approach The current risk-free rate of return (rRE) is 3.86%, while the market risk premium is 6.63%. the D'Amico Company has a beta of 0.78. Using the Capital Asset Pricing Model (CAPM) approach, D'Amico's cost of...
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Show work and answer correctly for thumbs up!
What is the present value of a $2000, 10 year, annual ordinary annuity at a 4% annual discount rate (round to nearest dollar) 1351 18,422 O 16,222 O 249,122
Show work and answer correctly for thumbs up!
For an initial investment of $10,000, you are offered the opportunity to receive $4,000 at the end of the year for the next 10 years. What is the irr of this opportunity? $16,840 o need to know the cost of capital O 38.45% O 8%
The cost of retained earnings the required rate of If a firm cannot invest retained earnings to earn a rate of return return on retained earnings, it should return those funds to its stockholders. The cost of equity using the CAPM approach The yield on a three-month T-bill is 3%, the yield on a 10-year T-bond is 4.30%. the market risk premium is 8.17%. and the Burris Company has a beta of 1.13. Using the Capital Asset Pricing Model (CAPM)...
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