What is the firm equity beta and effective annual rate

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Reference no: EM13975298

a) The asset beta for a particular firm is 0.90. Use Equation 9.6 to estimate the equity betas for the firm with 30% debt ratio and 35% tax rate. What is the firm’s equity beta?

b) A company has total book value of common stock equal to $850,000, a par value of $4 per share, 50,000 shares issued and outstanding, and the market value of the common stock is $83 a share. What is the company's additional paid-in capital?

c) A company has total book value of common stock equal to $850,000, a par value of $4 per share, 50,000 shares issued and outstanding, and the market value of the common stock is $83 a share. What is the company's market capitalization?

d) A company offers credit terms 5/20 net 40. What is the effective annual rate (i.e., the rate incorporating compounding) faced by borrowers who do not take the discount?

Reference no: EM13975298

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