User Account

All Pages

Calculate the cost of equity capital using CAPM

Assignment Help Accounting Basics
Reference no: EM132717534

Questions -

Q1. Calculate the cost of equity capital using CAPM if the risk-free rate of interest is 5 per cent, the return on the market portfolio is 9 per cent, the beta of the firm's assets is .8 and the and beta of equity is 1.2. Provide your answer as a percentage to two decimal places (15.32% should be entered as 15.32). Do not enter the % sign.

Q2. Assume that A limited paid a dividend of 23.2 cents per share just recently. The shares currently sell for $10.9. You also estimate that the dividend will grow steadily at 2.1 % per year into the indefinite future. What is the cost of capital, ke for A limited? Answer as a percentage accurate to two decimal places (11.32% should be entered as 11.32). Do not enter the % sign.

Reference no: EM132717534

Questions Cloud

Digital preservation can be defined as the long-term : Digital preservation can be defined as the long-term, error-free storage of digital information, with means for retrieval and interpretation,
Systematic process of collecting information : A Needs Assessment refers to a systematic process of collecting information to help management teams make informed decisions to drive change,
Calculate the transaction price to be allocated : Calculate the transaction price to be allocated to the performance obligations of AllFuels Limited and prepare the journal entry to record the March 2020 sales
Limitations of blockchain and emerging concepts : Blockchain continues to be deployed into various businesses and industries.
Calculate the cost of equity capital using CAPM : Calculate the cost of equity capital using CAPM if the risk-free rate of interest is 5 per cent, the return on the market portfolio is 9 per cent
Find the minimum acceptable unit price for GEM : The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. Find the minimum acceptable unit price for GEM
How much would Anne charge for a house : How much would Anne charge for a house with 3,300 square feet and 14 openings, based on high-low method, based on square footage
What are main difficulties in calculating cost of capital : What are the main difficulties in calculating cost of capital for diversified companies? Can diversification reduce all risk? Why or why not
What is the ending inventory balance at the end of the year : The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd