Shareholders expectation on their expectation

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Reference no: EM131552282

The following is your company's capital structure & other financial information:

           Long-term debt:    $400,000 @ 15% interest rate (before tax)

           Equity:                  $600,000

           Tax Rate:              40%

           Beta of the Co.     1.5

           The current yield rate of the 10-year Treasury Bond is 5%

           Normal Risk Premium is 10%

What is the minimum growth rate this company needs to achieve to satisfy the Shareholders’ Expectation on their expectation? Please do not put "%" in your answer. Just put the number (for example, 10 for 10%)

Reference no: EM131552282

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