Estimated cost of common-stock equity funding

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1. A firm has a beta of 1.1. The market return equals 8% and the risk-free rate of return equals 3%. Calculate the estimated cost of common-stock equity funding.

2. Billie Goat sat down and figured out that her total liabilities equaled $80,000 and her total assets equaled $200,000. What is Billie’s Solvency Ratio?

3. Do financial services companies have an incentive to provide nominal rather than true rates of return in their advertising?

Reference no: EM132044375

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