rate positively ..
Ans 17 | Cost of equity = | ||||
= Risk free rate + market Risk premium * beta | |||||
2%+8%*2 | |||||
18.00% | |||||
ans = | 18% | ||||
Ans 2 | Correct answer is option = | ||||
20 y & 2% coupon | |||||
Question 17 1 pts Ebey's Enterprises has a beta of 2. The stock is currently selling...
Ebey’s Enterprises has a beta of 2. The stock is currently selling for $12 a share. The overall stock market has a10 percent rate of return and a risk premium of 8 percent. What is the firm’s cost of equity? Group of answer choices 2% 20% 6% 22% 18%
Question 17 5 pts The following will be used to answer the next question Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share Common Stock: 300,000 shares outstanding selling for $80 per share, the beta is 1.5, the risk-free rate is 6% and the...
Question 17 5 pts The following will be used to answer the next question Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share Common Stock: 300,000 shares outstanding selling for $80 per share, the beta is 1.5, the risk-free rate is 6% and the...
Question 18 5 pts The following will be used to answer the next question. Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share. Common Stock: 300,000 shares outstanding selling for $80 per share, the beta is 1.5, the risk-free rate is 6% and the...
Question 19 5 pts The following will be used to answer the next question Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share. Common Stock: 300,000 shares outstanding selling for $80 per share the beta is 1.5, the risk-free rate is 6% and the...
Question 18 5 pts The following will be used to answer the next question Debt: 15,000 10% coupon bonds outstanding. 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share. Common Stock: 300,000 shares outstanding selling for $80 per share the beta is 1.5, the risk free rate is 6% and...
Question 16 5 pts The Doug and Bob Corporation is calculating its WACC. Its 1,000,000 bonds have a 7% coupon, paid semi-annually, a current maturity of 25 years, and sell for a quoted price of 115. The firm's 1,800,000 shares of preferred stock (par $100) pays a 7.5% annual dividend and currently sells for $95. Doug and Bob is a constant growth firm which just paid a dividend of $2.00 (D.), sells for $30.00 per share; it has 80,000,000 shares...
JoyFM common stock has a beta of 1.98. The stock is currently selling for $12 a share. The expected market return is 11 percent, and the expected market risk premium is 8 percent. According to analysts’ estimates, its dividend will grow at 5% per year. The company is expected to pay a dividend of $1.7 per share next year. What is the cost of equity of JoyFM company (Use SML and DGM)?
rate 17. Calculating the WACC You are given the following information concerning Parrothead Enterprises: LO 3 Debt: 13,000 6.4 percent coupon bonds outstanding, with 15 years to maturity and a quoted price of 107. These bonds pay interest semiannually. Common stock: 345,000 shares of common stock selling for $76.50 per share. The stock has a beta of 90 and will pay a dividend of $3.80 next year. The dividend is expected to grow by 5 percent per year indefinitely. 10,000...
10. Deep Mines has 14 million shares of common stock outstanding with a beta of 1.15 and a market price of $42 a share. There are 900,000 shares of 9 percent preferred stock outstanding, valued at $80 a share. The 10 percent semiannual bonds have a face value of $1,000 and are selling at 91 percent of par. There are 220,000 bonds outstanding that mature in 17 years. The market risk premium is 11% percent, T-bills are yielding 7% percent,...