The systematic risk of the risk-free asset is measured by

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Reference no: EM132032504

1) The systematic risk of the risk-free asset is measured by:

A) Standard Deviation of 0.0

b) A beta of 0

C) A beta of 1.0

D) A standard deviation of 1.0

2) What prportion of a firm is equaity financed if the WAVV is 15%, the before tax cost of debt is 10.77% the rate is 35%, and the required return of equity is 18%?

A) 70.26%

B) 72.73%

C) 77.78%

D) 54.00%

3) What would you estimate to be the required rate of return for equity investors if a stock sells for $50 and will pay a $2 divident that is expected to grow at a constant rate of 5%?

A) 9%

B) 10%

C) 12%

D) 15%

Please give a little explantion or show work.

Reference no: EM132032504

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