Calculate the expected return on the equity for quipta

Assignment Help Financial Management

Reference no: EM132041486

Quipta is a semi-conductor manufacturing firm with three divisions. These are Tools (TL), which constitutes 40 percent of the assets of the firm, Digital Equipment (DE), which constitutes 25 percent of the assets and Foundry Equipment (FD), which constitutes the remaining 35 percent of the assets. The unlevered betas of the three divisions (defined as the beta of the division if it were independent and 100% equity financed) are ßUTL- 1.5, BUDE-0.7 and ßuFD-0.5. Quipta's debt-to-equity ratio is 3/7 and the corporate tax rate is 34%. The expected return on the market portfolio is 13 %. Quipta can borrow at the risk free interest rate of 4% Calculate the expected return on the equity for Quipta.

Reference no: EM132041486

Questions Cloud

Good recommendations for best practices and strategies : What would be good recommendations for best practices and strategies to guide decision making for public sector or nonprofit organization?

Asynchronous and synchronous technology : What are the advantages and disadvantages of asynchronous and synchronous technology?

How public policy affecting public safety administration : Select a Federal Law or administrative rule from the past decade that resulted in a change in Public Policy affecting Public Safety Administration.

Applied by government and industry : What are the general principles associated with resilience as currently applied by government and industry?

Calculate the expected return on the equity for quipta : Quipta can borrow at the risk free interest rate of 4% Calculate the expected return on the equity for Quipta.

Officer training adequately covered the use of force : Assume you were asked to investigate whether a police officer training adequately covered the use of force. What would you review? Would you look at any data?

What agencies regulate securities markets : Randy's, a family-owned restaurant chain operating in Alabama, has grown to the point that expansion throughout the entire Southeast is feasible.

What is that money being spent on : What is that money being spent on? In your opinion, are they using their money effectively? How could they spend their money to better accomplish their goals?

Describe the importance of system safety : Describe the importance of system safety in the work place of today.

User Account

All Pages