What is diddys cost of equity

Assignment Help Financial Management
Reference no: EM131848234

Diddy Corp. stock has a beta of 1.3, the current risk-free rate is 3 percent, and the expected return on the market is 12.50 percent.

What is Diddy’s cost of equity? (Round your answer to 2 decimal places.)

Cost of equity %

Reference no: EM131848234

Questions Cloud

What is the present value of growth opportunities : What is the sustainable growth rate? What is the present value of growth opportunities? What is the P/E ratio?
What is the price per square foot of this asset : You see a house that is 3,000.00 square feet selling for $450,000.00. What is the price per square foot of this asset?
Significant impact on wide range of corporate performance : The recent Great Recession of 2008-2009 has had significant impact on a wide range of corporate performance.
What will be your preference-money market or capital market : what will be your preference- Money market (short term investments) or Capital market (long term investments)?
What is diddys cost of equity : Diddy Corp. stock has a beta of 1.3, the current risk-free rate is 3 percent and expected return on the market is 12.50 %. What is Diddy’s cost of equity?
What is effective annual rate of return on your investment : You expect to reinvest the coupons in account that pays an APR of 2.39%, with semi-annual compounding.What is effective annual rate of return on your investment
What are the weaknesses of each model : Is there a situation when one method is preferable to another and vice versa? What are the weaknesses of each model?
What is effective annual rate of return : You collect the coupon payment and sell the bond. What is your effective annual rate of return?
What must total asset turnover be : A firm wishes to maintain an internal growth rate of 7.8 percent and a dividend payout ratio of 40 percent. What must total asset turnover be?

Reviews

Write a Review

Financial Management Questions & Answers

  How much would it have to pay at the maturity date

Assume that HOS could issue a zero coupon bond at an annual interest rate of 4 percent with semi annual compounding for 20 years. If HOS receives $2,264.45 for the bond, how much would it have to pay at the maturity date?

  Are the rights underpriced or overpriced

Mitsi Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take three rights to buy a new share in the offering at a subscription price of $39. What price should the stock sell for ex-rights? Are the rights un..

  What is the equivalent monthly interest rate

A couple purchases a home and signed a mortgage for $240000 to be paid in equal monthly installments over 25 years, with interest i^(2) = 0.18. What is the equivalent monthly interest rate i? What are the monthly payments? How much principal is repai..

  What is the risk premium

The 1-year interest rate in the U.S. is 10%; in Switzerland it is 12%. The current spot rate (dollars per franc) is $0.40. What do you expect the 1-year forward rate to be? Is the franc selling at a premium or discount? If the expected spot rate in 1..

  What will be the change in the percentage terms

What will be the change in the bond’s price in dollars? What will be the change in the percentage terms?

  Coupon bonds on the market-what is current bond price

Aloha Inc. has 7 percent coupon bonds on the market that have 14 years left to maturity. If the YTM on these bonds is 8.3 percent, what is the current bond price?

  What is the operating cash flow for project in year two

You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. What is the operating cash flow for the project in year 2?

  Calculate the annual eva in a typical year

A project cost ?$1.5 million up front and will generate cash flows in perpetuity of ?$240,000. Calculate the annual EVA in a typical year.

  No dividends will be paid on the stock

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next eleven years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $15.00 per share 12 yea..

  Assume that due to rapid rate of technological depreciation

Suppose your friend, Pat, approaches you with a plan to get in on the solar panel leasing business. Pat has identified an opportunity to acquire panels sufficient to power 25 homes. Assume that due to the rapid rate of technological depreciation, the..

  Dividend payout ratio is expected to remain constant

what is the projected amount of dividends to be paid out next year? Assume the dividend payout ratio is expected to remain constant.

  Different salary arrangements

You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $79,000 per year for the next two years, or you can have $68,000 per year for the next two years, along wi..

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