What is the cost of capital of this company

Assignment Help Financial Accounting
Reference no: EM133044633

Question - Suppose that a company records a Beta risk of 0.80 and that the T-Bills risk-free rate is 3.0%. Also, suppose the market asset rate is 9.5%. What is the cost of capital (Equity) of this company?

a. 7.2%

b. 9.1%

c. 8.15%

d. None of the above

Reference no: EM133044633

Questions Cloud

Personality trait influences decision making : This essay aims to present the personality test results of the writer as well as discuss how the personality trait influences decision making.
Enduring set of traits and behaviours : The existence of "personality" as an enduring set of traits and behaviours distinguishes each individual from others.
Engagement levels of current employees : What is more important, raising the engagement levels of current employees or hiring employees with high potential?
At what interest rate would the firm want to refinance : New issues will cost $980,000 in issuing and underwriting expenses. At what interest rate would the firm want to refinance
What is the cost of capital of this company : Suppose that a company records a Beta risk of 0.80 and that the T-Bills risk-free rate is 3.0%. What is the cost of capital of this company
Impact on organizational success : Describe recent newsworthy events and their effect on agency public perceptions - impact on organizational success
What is the depreciation expense : On January? 1, 2024, Tyson Manufacturing Company purchased a machine for $41,500,000. What is the depreciation expense for 2024
Develop a proposal for the company : Apply the 6 step model to develop a proposal for the company. Make sure to support your proposal with sufficient data and clear arguments.
Components of a collective bargaining agreement : What are some of the components of a collective bargaining agreement? What does legally binding mean?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Which small positive returns to acquiring-company may be

Which Small positive or negative returns to acquiring-company shareholders may be explained by? Perceived cost reductions due to economies of scale in operation

  What the intrinsic value of the stock is

The stock of Todd Mountain Development Corporation has a beta of 0.60. Using the constant-growth DDM, the intrinsic value of the stock is

  How much is the revenue recognition

Assuming that Lions used the percentage-of-completion method, how much ($ in millions) is the revenue recognition in 2010

  What is the balance of the? companys merchandise? inventory

What is the balance of the? company's Merchandise? Inventory, as disclosed in the December? 31, 2019 balance sheet as per the periodic FIFO inventory

  Calculate present value of lease payment as percentage

Calculate the present value of the lease payments as a percentage to the value of the property. Should the lease be recorded as a capital lease or an operating.

  What is the equivalent single trade discount rate

If a series of trade discount rates are 18%, 10%, and 6%, what is the equivalent single trade discount rate? (Round to two decimal places)

  Find how much is balance of ordinary share capital account

During 2019, Apple Corp. had the transactions affecting the shareholder. How much is the balance of the ordinary share capital account as of September 30?

  Which of the best describes shareholders equity

Which of the best describes shareholders' equity? The right side of the balance sheet shows the firm's liabilities and stockholders' equity.

  First finance loses because sharon is a consumer

Sharon wanted a video camera so she could record her son's soccer games and birthday parties. Reliable TV, a retailer, sold a digital video recorder to Sharon. The recorder has a one year warranty. Sharon paid with a negotiable promissory note. Later..

  Determine the amount of income for the year ended December

If Heart receives P80,000 in the distribution of profits, determine the amount of income for the year ended December 31, 2020

  Regard to a needed piece of business equipment

Taxpayer, who has a marginal tax rate of 25%, has two options with regard to a needed piece of business equipment. She can buy the equipment now for $10,000 cash, use it for six years, and discard it (no salvage value). The asset would be expensed im..

  How does a bond issuer decide on the appropriate coupon rate

How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on bond

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