Calculate how much is the beta for our target firm

Reference no: EM132985104

Question: EasyCloud Co. has 40 million shares outstanding, currently trading at $1 per share, this Co. has $20 million debts from their corporate bond. Assume you want to calculate the cost of equity which requires beta of this company. You plan to use an industry average beta taken from other comparable firms, which is 1.5, based on an industry average debt to asset ratio of 40% within the same industry. Calculate how much is the beta for our target firm, assuming tax rate is 35%. (4 decimal places)

Reference no: EM132985104

Questions Cloud

Record the transactions in a horizontal financial statements : Record the transactions in a horizontal financial statements model to reflect their effect on Hardt's financial statements. Paid $15,000 on accounts payable.

What amount of inventory will appear on the balance sheet : What amount of inventory will appear on the balance sheet for 2012? A count of the inventory revealed that there was $18,500 of inventory on hand at the end.

Explain the types of influence tactics with examples : Explain the types of influence tactics with examples - issues than he was able to exert as a congressman, senator, and vice president of the United States

Explain what do deduce from the correlations : Explain What do you deduce from the correlations? Explain if you believe these to be short or long-term objectives and outcomes.

Calculate how much is the beta for our target firm : Calculate how much is the beta for our target firm, assuming tax rate is 35% - industry average debt to asset ratio of 40% within the same industry

What means if correlation of two variables is positive : Prepare a chart similar to the one in the downloaded file to indicate whether the correlation between variables A and B were found to be positive

Explain using the concepts of supply and demand : Explain using the concepts of supply and demand (the market theory) what could happen in terms of changes in price and quantity.

Calculate the companys current cost of capital : Calculate the companys current cost of capital and calculate the present value today for Teatree Co.'s terminal value

Calculate the amount of the firms after-tax cash floe : Calculate the amount of the firms after-tax cash floe from operations? Moby Dick Coperation has sales of $4,272,618; income tax of $538,746

User Account

All Pages