What is the project expected rate of return

Assignment Help Financial Management
Reference no: EM131930171

1. The capital structure for the CR Corporation includes bonds valued at $5,500 and common stock valued at $11,000. If CR has an after-tax cost of debt of 6%, and a cost of common stock of 16%, what is its WACC?

2. A project has an assigned beta of 1.2, the risk-free rate is 3.8%, and the market rate of return is 11.2%. What is the project's expected rate of return? A. 12.68% B. 11.41% C. 10.50% D. 9.61%

Reference no: EM131930171

Questions Cloud

Total debt-to-equity ratio-what is Plasti-techs WACC : San Dimas Energy Inc. has total debt-to-equity ratio of 0.6. Currently, its debt has a pretax interest rate of 10%. what is Plasti-tech's WACC?
What is probability of booming economy occurring : What is the probability of a booming economy occurring if these are the only two economic states?
Portfolio of three stocks with total market value : A portfolio of three stocks with total market value of $1,000,000 currently has a beta of 1.4. In light of an expected market downturn,
What should be the beta of replacement stock : What should be the beta of a replacement stock if an investor wishes to achieve a portfolio beta of 1.2 by replacing stock C in the following equally weighted p
What is the project expected rate of return : A project has an assigned beta of 1.2, the risk-free rate is 3.8%, and the market rate of return is 11.2%. What is the project's expected rate of return?
Make the project acceptable : What is the minimum cash flow that could be received at the end of year 3 to make the following project "acceptable"?
Compute the after-tax two-year realized compound yield : What is the after-tax holding-period return on the bond? Use the tax rates in part (b) to compute the after-tax two-year realized compound yield.
Create plan to implement firm strategy : Create a plan to implement a firm’s strategy and manage the change from current operations.
Identify on the balance sheet the current liabilities : Identify on the balance sheet the current liabilities that are definitely determinable and those that are probably estimates.

Reviews

Write a Review

Financial Management Questions & Answers

  What is payback period on this investment

What is the NPV of the investment when the cost of capital is 5%? 10%? What is the payback period on this investment?

  What is each investments internal rate of return

What is each investments internal rate of return? Should the firm make any of these investments? What is each investments net present value? Should the firm make any of these investments?

  Compute dividends over the next five years

Suppose that a firm’s recent earnings per share and dividend per share are $2.40 and $1.40, Compute the dividends over the next five years.

  Estimate target maximum acquisition price when discount rate

The table below shows the projected free cash flows of an acquisition target. The potential acquirer wants to estimate its maximum acquisition price at an 8% discount rate and a terminal value in year 5 based on the perpetual growth equation with a 4..

  Manufacture windsurfing equipment

In November 2012, Mario Bonsetti and Rico Sanchez incorporated Gnarly Vulcan Gear, Inc. (GVG), to manufacture windsurfing equipment.

  What is phoebes adjusted gross income

What is Phoebe's adjusted gross income for 2016? What is Phoebe's total tax for 2016?

  Debt–equity ratio for company based on market values

The company also has 2.7 million shares that sell for $24 per share. What is the debt–equity ratio for this company based on market values?

  Fixed assets are required to support this growth in sales

Madrigal Electromotive GmbH is currently operating at only 94 percent of fixed asset capacity. Current sales are $540,000. Fixed assets are $420,000 and sales are projected to grow to $760,000. How much in new fixed assets are required to support thi..

  Required rate of return

Assume that the risk-free rate is 6.5% and the expected return on the market is 10%. What is the required rate of return on a stock with a beta of 2.3?

  What is the firms horizon or continuing-value

Hart Enterprises recently paid a dividend, D0, of $2.75. It expects to have nonconstant growth of 24% for 2 years followed by a constant rate of 9% thereafter. The firm's required return is 10%. What is the firm's horizon, or continuing, value?

  What would the value be if the payments occurred forever

If the required return is 6 percent, what is the value of the investment? What would the value be if the payments occurred forever?

  Product innovation for consumers

In your opinion, which three (3) of the six (6) ‘Product Innovation for Consumers’ trends mentioned in the document are a priority for the Caribbean.

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