What must expected return on this stock be

Assignment Help Financial Management

Reference no: EM131915349

1. Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost of equity is 17 percent, and its pretax cost of debt is 8.5 percent. The tax rate is 32 percent. What is the company's target debt-equity ratio?

2. A stock has a beta of 1.55, the expected return on the market is 15 percent, and the risk-free rate is 9.75 percent. What must the expected return on this stock be?

Reference no: EM131915349

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