Homework Answers
Ans 9.61%
| Expected Return = | Risk free Return + (Market Risk Premium)* Beta |
| Expected Return = | 2.5% + 7.9% * 0.9 |
| Expected Return = | 9.61% |
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D Question 10 6 pts What is the Cost of Common Stock (capital) given the following...
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Question 17 5 pts The following will be used to answer the next question Debt: 15,000...
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Question 17 5 pts The following will be used to answer the next question Debt: 15,000...
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...
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...
Problem 10-6 Cost of Common Equity The future earnings, dividends, and common stock price of Callahan...
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QUESTION 6 Calculate Weighted Average Cost of Capital using a corporate tax rate of 35% •...
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Cost of common stock equity-CAPM Netflix common stock has a beta, b, of 1.7. The risk-free...
Cost of common stock equity-CAPM Netflix common stock has a beta, b, of 1.7. The risk-free rate is 4%, and the market return is 9%. a. Determine the risk premium on Netflix common stock. b. Determine the required return that Netflix common stock should provide c. Determine Netflix's cost of common stock equity using the CAPM. a. The risk premium on Netflix common stock is %. (Round to one decimal place)
Cost of common stock equity-CAPM Netflix common stock has a beta, b, of 1.6. The risk-free...
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Question 10 1 pts Given a market risk premium of 8.57% and a risk-free rate of...
Question 10 1 pts Given a market risk premium of 8.57% and a risk-free rate of 1.80%, what is the reward-to-risk ratio of a stock with a beta of 1.47 according to the CAPM? (answer as a fraction, give four decimal places)
Question 6 1 pts Intercoastal Corporation recently paid a common stock dividend of $2.50. Analysts predict that the firm and its dividends will grow at a rate of 12% per year. Intercoastal has a beta of 1.35. The current risk-free rate of interest is 5.0% and the current return on the market is 13%. What is the intrinsic value of Intercoastal common stock? O $114.50 O $73.68 O $100 $140.34 $127.20
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...
Problem 10-6 Cost of Common Equity The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $23.50 per share; its last dividend was $2.50; and it will pay a $2.60 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Round your answer to two decimal places. Do not round your intermediate calculations. % b....
QUESTION 3 "Assume that Tesla common stock has a Beta of 1.2, the risk-free rate of interest is 3% and the market risk premium is 5%. According to the CAPM, what should be Investors required rate of return for Tesla stock? 9.00% 9.20 % 5.40% 15.20 % 12.60% QUESTION 4 "You expect Caterpillar will pay dividends of 2.25 in one year, 2.50 in two years, and 2.75 in three years. From that point onwards, dividends will grow at 7% per...
QUESTION 6 Calculate Weighted Average Cost of Capital using a corporate tax rate of 35% • Debt Number of bonds outstanding - 10,000 price per bond 51,165 o par value per bond - $1,000 o coupon rate=6% (paid annually) • Years to maturity - 10 • Common Stock Number of shares outstanding - 1,000,000 o Price per share - $25 o Book value per share - $15 O Beta-1.4 O Risk free rate 4.5% • Market risk premium - 5%...
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Question 10 1 pts Given a market risk premium of 8.57% and a risk-free rate of 1.80%, what is the reward-to-risk ratio of a stock with a beta of 1.47 according to the CAPM? (answer as a fraction, give four decimal places)
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