Company new required rate of return

Assignment Help Finance Basics
Reference no: EM133118818

CAPM: req. rate of return

Devaney Corporation's stock had a required return of 9.15% last year when the risk-free rate was 2.00% and the market risk premium was 5.50%. Then an increase in investor risk aversion caused the market risk premium to rise by 1% from 5.5% to 6.5%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return?

Reference no: EM133118818

Questions Cloud

Critique the role HR plays in organizational performance : Critique the affect that HR has on business performance within contemporary organisational environments - business digitisation has had on Human Resource
Long-term investment ?decision-npv method : Jenny Jenks has researched the financial pros and cons of entering into a? 1-year MBA program at her state university. The tuition and needed books for a? maste
What is the present value of alternative : You are negotiating the terms of a legal settlement. You have been given several different settlement options. Your average rate of return on the assets you cur
Compute diluted earnings per share for Robertson Company : Robertson's after-tax net income was $83,000, and the tax rate was 40%. Compute 2014 diluted earnings per share for Robertson Company
Company new required rate of return : Devaney Corporation's stock had a required return of 9.15% last year when the risk-free rate was 2.00% and the market risk premium was 5.50%. Then an increase
Compute galaxy firm value : The corporate tax rate is 21%, but there are no personal taxes. The present value of Galaxy's bankruptcy costs is $18 million. Compute Galaxy's firm value
Determine the cost of equity : 1. You have the following information for Horizon Manufacturing Corp.:
What discount rate would make you indifferent : What discount rate would make you indifferent between receiving $3,155.00 per year forever and $5,753.00 per year for 23.00 years? Assume the first payment of b
Calculate the effective interest rate and the cost of debt : Interest on the 3 debt instruments are annual. Calculate the effective interest rate and the cost of debt for the company after tax

Reviews

Write a Review

Finance Basics Questions & Answers

  Determining the indifference interest rate

If you won the lottery and had the choice of a lump-sum payoff or an annuity payoff, what factors would you consider besides the implied interest rate (indiffer

  What is the probility that the return on the stock

What is the probility that the return on the stock in any one year will be lower than -9.7%

  Consider the company you work for or if your company is not

consider the company you work for or if your company is not publicly held pick a company you are familiar with. would

  Standard deviation of this two-currency portfolio

Based on this information the standard deviation of this two-currency portfolio is approximately?

  Calculate the value of the bond if market interest rate

Calculate the value of an option free, 15-years, $1,000 par, 10% annual pay bond if: A. Annual interest rate is 12%. B. Annual interest rate is 8%.

  Buyer of imported goods and seller

In an international currency transaction (for example between a buyer of imported goods and a seller of these same goods) which party assumes the risk?

  Monthly dividends will cause 3 times

Since monthly dividends will cause 3 times as much work than quarterly dividends, why do you think they made the change?

  Determine the amount that b net income for tax purposes

In 20X9 parcel 1 was sold for $60,000 and parcel 2 was sold for $100,000 as part of the rental property sale. Determine the amount that B's net income for tax

  What is the total cash flow in year of the project

ABC, Inc is planning the purchase of a new equipment which will cost $33,638. The project is expected to last for 4 years. The equipment will have a book value.

  Identify the impact that technology has had in assisting you

Identify the impact that technology has had in assisting you in pursuing your personal financial goals. Provide at least two examples to support your rationale.

  How does a dutch auction work

How does a Dutch auction work? Not more than 4 short sentences.

  Include calculations that support your analysis of various

write a 1050- to 1750-word paper paper in which you compare and contrast three potential financial outcomes your

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!

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