What is the expected return on asset

Assignment Help Microeconomics
Reference no: EM132175423

Question: 1. Cost of debt. An outstanding bond has a $1000 face value, a 9.5 percent annual coupon, and 10 more years until it matures. The bond currently sells for $1153. What are the historical after-tax cost of debt and the current after-tax cost of debt? Assume a 40 percent tax rate.

2. Capital asset pricing model. What is the expected return on asset X if it has a beta of 0.85, the expected market return is 11.50 percent, and the risk-free rate is 5.75 percent?

Reference no: EM132175423

Questions Cloud

How much income tax must the corporation pay : Martin Corporation had net operating income of $40,000. It also had $20,000 of interest expense and $35,000 of interest income during 2000.
Should the borrower refinance : All payments are monthly. Should the borrower refinance if he plans to own the property for the remaining loan term
Construction in the commercial list : Student 1 claims that the commercial sector includes automobiles and churches. Student 2 agrees but also includes construction in the commercial list.
Describe the process of legal change : Describe the process of legal change in two of the four religions (Judaism, Catholicism, Protestantism, and Islam) by drawing on two specific instances.
What is the expected return on asset : Capital asset pricing model. What is the expected return on asset X if it has a beta of 0.85, the expected market return is 11.50 percent.
Which project should recommend and why : Hurdle rates. Assume that Hershey Foods has a policy that cost savings projects must earn a 16 percent hurdle rate and that new products must earn a 25 percent.
What does freedom or love or happiness or morality mean : What does freedom, love, happiness or morality mean? How is freedom, love, happiness or morality different for different people?
Depending on the firm selling the product : In competitive markets the products sold are different depending on the firm selling the product.
What company has a better grasp on expenses : What did you notice? What company has a better grasp on expenses? What company has a higher/lower % of debt-equity to total assets

Reviews

Write a Review

Microeconomics Questions & Answers

  What maximum total weight limit on passengers

Your consulting company has been hired by an airline to analyze data on passenger and luggage weights. The data refer to a 200 seat aircraft that is always full. You are given data that show that as a good approximation passenger weights W ~ N (15..

  Due to the housing bubble

Due to the housing bubble. Many houses are not selling for much less than their selling price just two to three years ago. There is evidence that homeowners with virtually identical houses tend to ask for more if they paid more for the house. What fa..

  Setting of monetary policy

The various financial indicators suggest that this setting of monetary policy is exerting a degree of restraint on the economy and the high exchange rate and subdued consumer spending are putting downward pressure on some prices, although increases ..

  Describe how hrm can maintain cost effective pay

Describe how HRM can maintain cost effective pay and benefit programs within this environment in which laws and regulations seem to change on a regular basis.

  Affect resource conservation and the speed of depletion

Affect resource conservation and the speed of depletion?

  Currently keeping large quantities of excess reserves

Why are banks currently keeping large quantities of excess reserves? What are the monetary policy implications of banks keeping large quantities of excess reserves? In particular how does it change the efficacy of open market operations?

  Find the level of output q

Find the level of output q that will maximize the firm's total revenue. Also, compute the maximum amount of total revenue received by the firm.

  Analyze impact of government policy on long-term growth rate

Discussion: Endogenous Verses Exogenous Growth Theories. Analyze the impact of government policy on the long-term growth rate of an economy.

  How much does the cost in each year decrease

If the residents of Green Valley (of Problem 4.3) reduce their individual trash generation by 2% per year, how much does the cost in each year decrease?

  What is the unemployment rate in myland

Given this information, what is the unemployment rate in Myland? Show how you found your answer for full credit. Suppose the government changes how they calculate the unemployment rate: the government decides to count discouraged workers as unemploy..

  Explain how your reading and experience supports materialism

These are dualism, materialism, idealism and alternative views. Of the four modern metaphysical ideas, which seems most logical to you Briefly define the view you selected and explain how your reading and experience supports it.

  Determine the firm output and price

Under patent protection, a company has a monopoly in the production of a high tech component. Market demand is estimated to be: P = 100 - 0.2Q.

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