Expected return of investing in company c

Reference no: EM13789996

1. Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk free rate is 6% and the market risk premium is 4%. What is the expected return of investing in Company C? Show your work.

2. Your stock portfolio consists of only two stocks. You have $30,000 in Company A and $35,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio? Show your work.

3. A company has a capital structure of 50% debt and 50% equity. The YTM on the company's bonds is 8%, and the company's effective tax rate is 40%. The cost of equity is 13%. What is the company's WACC? Show your work.

Reference no: EM13789996

Questions Cloud

Projected return on investment for college : Develop a three- to five-page analysis (excluding the title and reference pages) on the projected return on investment for your college education and projected future employment. This analysis will consist of two parts.

Plot the consumption function on a scale diagram : Compute nominal GDP for each year in economy - Compute the average propensity to consume for each level of income and fill in the table.

Describe the globalization or internationalization : The globalization, or internationalization, of the marketplace has become one of the defining events of our time. The pressure to produce a good or service while controlling costs and maintaining quality has profoundly affected the manufacture, d..

Bronfenbrenner''s ecological model issues : How do you think technology, specifically social media, influences a child's mesosystems?

Expected return of investing in company c : 1. Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk free rate is 6% and the market risk premium is 4%. What is the expected return of investing in Company C? Show your work.

Business analyst for a well-known design firm : You have been hired as a business analyst for a well-known design firm. Currently, they utilize technology for their day-to-day operations but not to analyze data that could help with making business decisions.

Discuss how the strategies are applied : Assume the project sponsor within a major corporation has championed a project for the past year, and the concept was finally approved. Of the strategies a sponsor would use to ensure project success, describe three that you think are the most imp..

Endocrine and cardiovascular systems disorders terminology : When a blood clot or other debris formed in a distant part of the body is carried to the brain and blocks one of the narrower brain arteries .

Importance of the risk and return balance : Critically reflect on the importance of the risk and return balance. Consider the following:

User Account

All Pages