What must expected return on stock

Assignment Help Financial Management

Reference no: EM131919723

1. Lamey Co. has an unlevered cost of capital of 10.9 percent, a tax rate of 35 percent, and expected earnings before interest and taxes of $21,800. The company has $25,000 in bonds outstanding that sell at par and have a coupon rate of 6 percent. What is the cost of equity?

14.29 percent

14.07 percent

11.60 percent

15.64 percent

13.36 percent

2. A stock has a beta of 1.65, the expected return on the market is 12 percent, and the risk-free rate is 4.8 percent. What must the expected return on this stock be?

17.51%

17.35%

15.85%

16.68%

24.6%

Reference no: EM131919723

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