What is def cost of equity capital

Assignment Help Finance Basics
Reference no: EM13286096

DEF Ltd. has a beta of 1.15. If 3-month Treasury bills currently yield 7.9% and the market risk premium is estimated to be 8.3%, what is DEF's cost of equity capital?

A) 17.45%
B) 8.36%
C) 9.55%
D) Undetermined

 

Reference no: EM13286096

Questions Cloud

Determine how many kw do the units take : A 25-kVA load with power factor 0.80 lagging has a group of resistive heating units added at unity power factor. How many kW do these units take, if the new overall power factor is 0.85 lagging
What will the present value of the cca tax shield : what will the present value of the CCA tax shield when it disposes of the machine at the end of year 4? Assume that the relevant discount rate is 10%.
Define esters and amides can be most easily and conveniently : Esters and amides can be most easily and conveniently prepared by nucleophilic acyl substitution reaction on
Determine complex power before the addition of the capacitor : The addition of a 20-kvar capacitor bank improved the power factor of a certain load to 0.90 lagging. Determine the complex power before the addition of the capacitors, if the final apparent power is 185 kVA.
What is def cost of equity capital : DEF Ltd. has a beta of 1.15. If 3-month Treasury bills currently yield 7.9% and the market risk premium is estimated to be 8.3%, what is DEF's cost of equity capital?
Determine the current in the tube : A potential difference is applied between the electrodes in a gas discharge tube. In 1.7 s, 3.2 1016 electrons, What is the current in the tube
State potential energy of the system reaches lowest value : Bond length is the distance between the centers of two bonded atoms. On the potential energy curve, the bond length is the internuclear distance between the two atoms when the potential energy of the system reaches its lowest value.
Which set of projects would maximize shareholder wealth : XYZ Inc. has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset.
What is the volume of the wood in the wooden block : Suppose you have a rectangular wooden block with dimensions 8.0 cm x 8.0 cm x 9.0 cm that has a density of 0.85 x 10^3 kg/m^3. What is the volume of the wood in the wooden block

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute the required rate of return on fbc stock

Fris B. Corporation stock is currently selling for $42.86. It is expected to pay a dividend of $3.00 at the end of the year. Dividends are expected to grow at a constant rate of 3% indefinitely. Compute the required rate of return on FBC stock.

  Theory problems based on us regulations

Theory problems based on US regulations and distinguish between economies of scale and economies of scope

  Compute the price of alcoas stock

Alcoa Inc, is expected to have cash flows of $8 per share in the coming year. Cash flows are expected to decline at the rate of 2% per year. The risk-free rate of return is 6% and the expected return on market is 14%. The stock of Alcoa has a beta..

  What is the market value of kurz assets

What is the market value of Kurz's assets (including any tax shields) just after the debt is issued, but before the shares are repurchased?

  Which financing option should a firm choose

Based solely on their effective costs, which financing option should a firm choose?

  What is the effective annual interest rate of the loan

Carry Trade, Inc., borrows yen when the yen is trading at Y110/US$. If the nominal annual interest rate of the loan is 3% and at the end of the year the yen trades at Y120/US$, what is the effective annual interest rate of the loan?

  Determine the volume of sales

Hard Rock Company manufactures disposable thermometers that are sold to hospitals through a network of independent sales agents located in the US and Canada.

  Prepare closing entries and the post- closing trial balance

Prepare closing entries and the post- closing trial balance.

  Explain the difference between the two measures

You must submit documentation showing how answers were reached. Note the following for your report: EVA=EBIT (1-T)- (Total investors capital x after-tax cost of capital) Free Cash Flow = EBIT(1-T) + Depreciation - (Capital Expenditures+ Increase i..

  What is the profit or loss associated with copper

Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper?

  Determine credit card balance after two years

Leslie receive $2000 a month and rents an apartment for $600 a month, and also has a credit card with an yearly interest rate of 7 percent and a balance of $1500.

  What is the expected return

You own a 15 year,1000 par value bond pauing 8 percent interest. Tthe market PRICE IS $775 and your rate of return is 13%.

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