How do make an assumption on what premium should be used

Assignment Help Financial Accounting
Reference no: EM132964394

Problem 1: When calculating the wacc here, we are assuming market risk premium as 6%. When we put in those values, we get the answer as 11.57% and not 12.7% as cost of equity. Why should we use 6% market premium? How do we make an assumption on what premium should be used?

Reference no: EM132964394

Questions Cloud

What can do right away to address credit card payments : Francesca just lost her job and is looking for a new one. What can do right away to address credit card payments? Apply for a payday loan service.
What amount should land be recorded in accounting records : What amount should the land be recorded in the accounting records of Focus Company? Donner Company is selling a piece of land adjacent to its business premises.
Investigate problematic situations : Critically assess the ways by which digital transformation should be planned and managed for a client and Integrate theoretical concepts and technologies
What is jumbotron total cash collections for february : What is Jumbotron's total cash collections for February? Jumbotron Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000
How do make an assumption on what premium should be used : How do make an assumption on what premium should be used? When calculating the wacc here, we are assuming market risk premium as 6%.
How much did the firm collect in the month of april : The accounts receivable period is 30 days. How much did the firm collect in the month of April? Assume that a year has 360 days.
Describe four measurement bases that may be used to measure : Describe four measurement bases that may be used to measure assets. What factors should an organisation consider when choosing an appropriate measurement
How much will lakeside industrial receive in total : How much will Lakeside Industrial receive in total from selling the additional 1,800 shares? Ignore all transaction and flotation costs.
Determine the amount of any tax credits : Determine the amount of any 2020 tax credits that Farah will have related to her spouse and son.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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