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1. Given the following information for Indiana Power Co., find the WACC. The company's tax rate is 35 percent; Debt: 4,000 7 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 103 percent of par; the bonds make semiannual payments; Common stock: 90,000 shares outstanding, selling for $57 per share; The firm’s beta is 1.10; Assume an 8 percent market risk premium (Remember the risk premium = [E(RM) – Rf]; Rf = 6 percent risk-free rate.
D. 10.15%
B. 8.00%
A. 14.80%
C. 6.72%
2. Using the CAPM, a stock has a beta of 1.3, the expected return on the market is 9 percent, and the risk-free rate is 4 percent. What must the expected return on this stock be?
C. 14.00%
B. 10.50%
D. 25.70%
A. 11.70%
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Complete the table below to determine: (1) the unit profit implications of a $2 decrease in the retail price for VH.
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Calculate the return and risk of a two asset portfolio. Asset 1 has an annualized expected real return of 5.5% and a weight of 35% in the portfolio. Asset 2 has an annualized expected real rate of return of 2.0% and a weight of 40% in the portfolio.
Suppose you are considering buying a new car. You are going to make monthly payments (at the end of each month) on a loan of $33,000 for five years. If the annual percentage rate is 7.5% what is your monthly payment? Based on your payment, what is th..
Discuss three verbal communication elements and three nonverbal communication elements
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