What is diamond ltds cost of equity capital

Reference no: EM133326465

Question 1. Assume that Diamond Ltd's last dividend was $2 per share and the dividend is expected to grow at 7.5% indefinitely. The shares currently sell for $30. What is Diamond Ltd's cost of equity capital?

Question 2. What is the market return if the expected return on asset A is 15% and the 10-year government bond rate is 6%. Beta for asset A is 0.9.

Question 3. Shares are currently selling for $4.4625. At the beginning of the year you bought them for $4.25 and during the year a dividend of 21.25 cents per share was paid. What is the return?

Question 4. Suppose that your firm has a cost of equity of 18% and a cost of debt of 8%. If the target D/E is 0.60 and the tax rate is 35%, what is the firm's WACC?

Reference no: EM133326465

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