Explain the expected rate of return, Operation Management

Assignment Help:

Debt: Jones Industries borrows $600,000 for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)?

Internal common stock: Jones Industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US Treasury bill is 3 percent, and the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones's stock (cost of equity). Here are the details:

Jones Total Assets

$2,000,000

Long- & short-term debt

$600,000

Common internal stock equity

$400,000

New common stock equity

$1,000,000

Total liabilities & equity

$2,000,000


Related Discussions:- Explain the expected rate of return

Explain companys strengths and weaknesses, How can value-chain analysis hel...

How can value-chain analysis help identify a companys strengths and weaknesses?

Explain concerns for product design in a dfma program, Name and briefly des...

Name and briefly describe the four primary concerns for product design in a DFMA program.

Identify the most vital factors in each perspective, Summarize the classica...

Summarize the classical, behavioural and quantitative perspectives on management Identify the most important factors in each perspective

Why insufficient to handle the increased workload, A company that produces ...

A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering t

Change Management in Process/Systems?, main principles of project managemen...

main principles of project management aiding the operations manager/manageress in introducing change to the process/system?

Explain what appears to be the primary supply chain, What appears to be the...

What appears to be the primary "secret" of successful supply chain management?

Explain what are the three governmental levels of correction, What are the ...

What are the three governmental levels of correctional systems?

What is process of implementing a new strategy, In most cases, organization...

In most cases, organizations adjusted their structures as part of the process of implementing a new strategy. Why might this practice not be advisable?

Explain if the telethon sued me for my pledge, I was watching a telethon on...

I was watching a telethon on the TV late on evening. I was so moved by the telethon; I called and pledged $10,000. In the morning when I informed my husband what I pledged, he w

Impact on the practice of leadership, Question: The fundamentals of Lea...

Question: The fundamentals of Leadership practice are still very much the same as 10 years back but the context has dramatically changed! i. Enumerate the factors in this n

Write Your Message!

Captcha
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