Difference between the cost of equity and cost of capital

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Reference no: EM132014603

1. Suppose you invest $2500 each year in a savings account that earns 12.5% per year. How much will be in the account in 7 years?

2. You can purchase an asset that will pay you $2,000 a year for 20 years. If you must earn at least 3% on any investment, about how much would this be worth to you?

3. For an all equity firm, what is the difference between the cost of equity and the cost of capital?

Reference no: EM132014603

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