What might be reasonable costs of capital for average

Assignment Help Financial Management

Reference no: EM132032920

1. Suppose a firm estimates its WACC to be 10%. Should the WACC be used to evaluate all of its potential projects, even if they vary in risk? If not, what might be "reasonable" costs of capital for average-, high-, and low-risk projects?

2. Zen Tek Corp's next expected dividend, D1, is $3.05; its growth rate is 6.1%; and its common stock now sells for $35.10. New stock (external equity) can be sold to net $33.20 per share. What is Zen Tek Corp's cost of retained earnings, rs? Round your answer to two decimal places. Show your work to receive full credit.

Reference no: EM132032920

Questions Cloud

People argue that a minimum wage worker : The Federal Minimum Wage in 1968 was $1.60 while today it is $7.25. Obviously $7.25 is much, much higher than $1.60, so why do people

Are nba players overpaid-underpaid-paid the right amount : Are NBA players overpaid, underpaid, paid the right amount? Argue in terms of marginal revenue product (MRP).

Identify key considerations when selling a home : How do you feel about being grouped into classes in the insurance underwriting process? Do you feel that insurance companies should treat all such groups.

Explain why tournaments are attractive to organizers : Explain why tournaments are attractive to organizers who want players to exert maximum effort?

What might be reasonable costs of capital for average : Suppose a firm estimates its WACC to be 10%. what might be "reasonable" costs of capital for average-, high-, and low-risk projects?

Explain in the context of human capital : Explain who should bear the cost of agility training for an NFL wide receiver. Should the team pay, or the player? Explain in the context of human capital.

Calculate the total increase in economic activity : If the marginal propensity to consume in this city is .95, calculate the total increase in economic activity for the city due to this increase in income

What was the inflation rate during that period : Create a line graph of the percentage changes (inflation rates) from a year earlier. Which period experienced the highest inflation rate?

Selected using present worth incremental analysis : Which project should be selected using present worth incremental analysis?

User Account

All Pages