Estimated risk premium between the company bonds and stocks

Assignment Help Financial Management

Reference no: EM131551016

Pollo Inc.'s 6.42% bonds have a YTM of 10.92%. The estimated risk premium between the company's bonds and stocks is 4%. Pollo's cost of common equity, Re, is ____%. Round your final answer to 2 decimal places (example: enter 12.34 for 12.34%), but do not round any intermediate work in the process.

Reference no: EM131551016

Questions Cloud

What is avicorps pre-tax cost of debt : What is Avicorp's pre-tax cost of debt? If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?

How much does share of preferred stock cost today : Fifth National Bank just issued some new preferred stock. how much does a share of preferred stock cost today?

Three types of moderate cost credit options : What are three types of Moderate Cost Credit options?

Risk premium between the company stock and bond returns : The estimated risk premium between the company's stock and bond returns is 5%.

Estimated risk premium between the company bonds and stocks : Pollo Inc.'s 6.42% bonds have a YTM of 10.92%. The estimated risk premium between the company's bonds and stocks is 4%.

What is required rate of return on stock : The historical return on equity (ROE) of 17 percent is expected to continue in the future. What is the required rate of return on the stock?

Stock price would currently be estimated : Assume the risk-free rate is 5%, and the Market Risk Premium is 7%. The stock price would currently be estimated to be $________.

What is the required rate of return on stock : What is the required rate of return on the stock?

Bought bond with an annual coupon : Suppose you bought a bond with an annual coupon rate of 5.4 percent one year ago for $890. what was your total real rate of return on this investment?

User Account

All Pages