What is the company cost of equity capital

Assignment Help Financial Management
Reference no: EM132050147

1. A new IT server for a company will cost $407,432.00 today. The company expects the server will create an incremental cash flow to the firm of $134,435.00 per year. The company wants an 8.00% return for all capital budgeting projects. The company will run the server for the next 5 years. What is the IRR of this project?

2. Fifteen, Inc.'s common stock has a beta of 0.9. The risk-free rate is 5.4 percent and the expected return on the market is 8.7 percent. What is the company’s cost of equity capital?

Reference no: EM132050147

Questions Cloud

Standard deviation to your arbitrage strategy with leverage : What is the return and standard deviation to your arbitrage strategy with this leverage?
Compute the standard deviation of monthly returns : Compute the standard deviation of Kohls’ monthly returns.
Estimated risk premium between company stock and bond : The estimated risk premium between the company's stock and bond returns is 6%.
Firm weighted average cost of capital : BlockOut Co. has 78,543 bonds outstanding that are selling at par value. What is the firm's weighted average cost of capital?
What is the company cost of equity capital : The risk-free rate is 5.4 percent and the expected return on the market is 8.7 percent. What is the company’s cost of equity capital?
What is the portfolio beta : Ali invests 70% of his portfolio in Qibla Cola and 30% in Sahabah Shoes. Based on the above data, what is the portfolio's beta?
Based on irr and cost of capital-should they accept project : The company will run the server for the next 5 years. Based on the IRR and cost of capital, should they accept the project? (YES or NO)
What is company wacc : What is the company’s WACC?
What is the project net present value : What is the net present value of this investment given your expectations? What is the project's net present value?

Reviews

Write a Review

Financial Management Questions & Answers

  Variance and standard deviation of the net present worth

What is the variance and standard deviation of the net present worth from investing in the stock?

  Short term debt creditors and equity investors

List the thing that short term debt creditors and Equity investors are interested in seeing in a company's financial statement

  Calculate the expected return in japanese deposits

Does covered interest parity hold in this example? If so, how do you know? Calculate the expected return in Japanese deposits.

  Shareholders to approve such compensation system

If you were a CEO, how do you convince your shareholders to approve such a compensation system?

  Created the possibility of moral hazard for large banks

The "Too big to Fail" policy has created the possibility of a moral hazard for large banks. The cause of this moral hazard is related to:

  Runge-kutta method

Use Runge-Kutta method to answer the solution.

  Discounted cash flow model presented in exhibit

Using the sales forecasts for Tysabri presented in Exhibit A, and using the discounted cash flow model presented in Exhibit B, what do you think Elan is worth?

  Breach of contract and emotional disturbance causes

A contractor departed from the specifications at a number of points in a contract to build a house. The cost to put the house in the condition called for by the contract was approximately $14,000. The contractor was sued for $50,000 for breach of con..

  Intervention effects

Intervention Effects. Assume there is concern that the United States may experience a recession. What about U.S. importing firms?

  What is the bond equivalent yield

A U.S. Treasury bill with 64 days to maturity is quoted at a discount yield of 1.80 percent. What is the bond equivalent yield?

  Compute the estimated tax liability on the differences

Compute the estimated tax liability on the differences between the estimated current value of the assets and liabilities and their tax bases.

  What is current market price of the bonds

What is the current market price of the bonds?

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