User Account

All Pages

What is the expected return on asset x

Assignment Help Microeconomics
Reference no: EM131916105

Problem

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: EM131916105

Questions Cloud

What kinds of additional information would you need : What kinds of additional information would you need to have in order to draw sharper comparisons?
What is the value of your futures position on monday : In order to hedge yourself, which position in Eurodollar futures will you take (i.e. buy or sell, contract maturity, and the number of contracts)?
What is the npv of the given project : Its pretax cost of equity is 14 percent, and its pretax cost of debt is 8 percent. The tax rate is 40 percent. What is the NPV of this project?
Fill in the net profit per unit to amcr corp : Potter, Inc., based in Washington, exports products to a German firm and will receive payment of €220,000 in three months.
What is the expected return on asset x : 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?
How much should you receive for the ncd if you sell it : A 182-day $14 million negotiable CD has a 5.00% annual rate quote. It is currently selling at par as market rates are 5%. Thirty days have passed.
What is the marginal tax rate and average tax rate : The Green Corporation had net income from operations of $130,000 in 2000, including $30,000. What is the marginal tax rate and average tax rate?
Estimate the required return on equity for providence : Each company has a tax rate of 34 percent. The risk-free rate is 6 percent and the expected return on the market portfolio is 12.5 percent.
What is the payback period for hudson hall : If there are no interest fees to consider, and if only student dorm fees are applied to the capital fund, what is the payback period for Hudson Hall?

Reviews

Write a Review

Microeconomics Questions & Answers

  The fun back in dysfunctional families

Putting the "Fun" Back in "Dysfunctional Families"

  State whether each of the following events will result in a

state whether each of the following events will result in a movement along the demand curve for mcdonalds big mac

  Discuss one aspect of the low-cost-carrier

Discuss one aspect of the low-cost-carrier business model, such as Ryanair's, that provides a sustainable cost advantage over a large network carrier, for example, British Airways.

  Set up the general form of the lp model

Set up the general form of the LP model for the following word problem. A cash grain farmer in Central Iowa has 600 acres of cropland available on which she plans to grow corn and soybeans in the spring of 2011. She has made some budgets, which ta..

  Possibility of greece leaving the euro zone

In the past couple of years, there was much talk about the possibility of Greece leaving the euro zone and reinstating its earlier currency, the drachma. If Greece did leave the euro zone and reinstate the drachma, what do you think the US$/drachma e..

  Develop a paper detailing an analysis of market structures

Develop a paper detailing an analysis of market structures and relating pricing strategies that are suitable for each of these structures. Furthermore, include a real world example of pricing strategy for a specific U.S. company by identifying its..

  Define difference between human capital and physical capital

According to Keynes, in order to get the economy out of a recession, the government should plan for a budget deficit encourage firms to export to other nations, thereby jump-starting the economy follow an expansionary monetary policyfollow a contract..

  How would you interpret ß2

If there is a difference between β2 estimated for current-dollar GDP and that estimated for constant-dollar GDP, what explains the difference?

  Determine consumer as optimal lifetime consumption plan ca

consider two consumers a and b. a and b both want perfect consumption smoothing c cf and both have no current wealth.

  Determine what fraction of expenditures is recycled

The government of Talonia has decided to stimulate its economy by increasing is spending during the upcoming fiscal year. Determine what fraction of expenditures is recycled and calculate the value of Talonia's multiplier.

  Change in consumer confidence on the economy

What is the likely effect of the change in consumer confidence on the economy? Explain this using the multiplier concept of fiscal policy (Macroeconomics)

  Who should determine economic policy goals for the nation

Who should determine the economic policy goals for the nation: the government democratically elected by the public or a central bank whose directors (or governors) are not elected and cannot be made directly responsible to the public? What are som..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd