Suppose Pepsicos stock has a beta of 0.59. If the risk-free rate is 3% and the expected
Question:
Suppose Pepsico’s stock has a beta of 0.59. If the risk-free rate is 3% and the expected return of the market portfolio is 7%, what is Pepsico’s equity cost of capital?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 50% (2 reviews)
Using the Capital Asset Pricing Model CAPM formula with the provided values Cost of Eq...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
Question Posted:
Students also viewed these Business questions
-
The CFO of Bunyan Lumber Corporation, Anita Rai has decided to invest some money in the financial market to diversify the risks of business operations and increase rate of return. She has been...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
26. With its current leverage, Impi Corporation will have net income next year of 4.5 million. If Impis corporate tax rate is 35% and pay 8% interest on its debt, how much additional debt can Impi...
-
Evaluate the stiffness matrix for the elements shown in Figure P11-6. Let E = 100 GPa and v = 0.3? Figure P11-6, (a) (b) (25, 25.0) 2 (10, 0, 0) (40, 0,0) (25, 0, 25) (10, 7, 0) (4, 2, 0) (12, 2, 0)...
-
A national polling organization has been hired to estimate the mean amount of cash carried by adults in the United States. The original sampling plan involved telephone calls placed to 2500 different...
-
Christensen Shipyards built a 155-foot yacht for Tiger Woods at its Vancouver, Washington, facilities. It used Tigers name and photographs relating to the building of the yacht in promotional...
-
7. Explain how to synthetically create the equity-linked CD in Section 3 by using a forward contract on the S&P index and a put option instead of a call option. (Hint: Use put-call parity. Remember...
-
Describe the key uses of CPM and Gantt charts.
-
PROBLEM about the Alice is a world famous chef who operates Chez Panache (Chez"), a restaurant structured as an Scorporation. She is the sole shareholder. In the current year, Chez generates $2.5...
-
Aluminum maker Alcoa has a beta of about 1.96, whereas Hormel Foods has a beta of 0.65. If the expected excess return of the marker portfolio is 3%, which of these firms has a higher equity cost of...
-
Suppose Autodesk stock has a beta of 2.10, whereas Costco stock has a beta of 0.75. If the risk-free interest rate is 5.5% and the expected return of the market portfolio is 14%, what is the expected...
-
A rigid, well-insulated container is initially divided into three compartments. The top compartment contains a vacuum. It is separated from the middle compartment A by a frictionless mass of 1000 kg...
-
Q2 2 Points The time between students pinging professor with questions during an exam is modeled by an exponential random variable X (measured in minutes) with parameter (usual notation) Q2.1 1 Point...
-
A. Describe what the formula P = M A E represents. B. What happens if one of these factors becomes deficient? C. In terms of performance, identify the four different types of reinforcement. Provide...
-
1-3.2) K Question 10, 3.1.37 Part 1 of 6 > HW Score: 53.33%, 6.4 of 12 points O Points: 0 of 1 Save Because the mean is very sensitive to extreme values, it is not a resistant measure of center. By...
-
Research the company and obtain the following information: Mission Statement - Purpose of their existence Goals and objectives (What are they in business for) SWOT analysis for this company Based on...
-
please write one page for the concept of organizational structure one page paper of factors affecting organizational structure.
-
Cambridge Manufacturing is evaluating the introduction of a new product that would have a unit selling price of $100. The total annual fixed costs are estimated to be $200,000, and the unit variable...
-
The bookkeeper for Riley, Inc., made the following errors: a. A cash purchase of supplies of $357 was recorded as a debit to Supplies for $375 and a credit to Cash of $375. b. A cash sale of $3,154...
-
Happy Valley Homecare Suppliers, Inc. (HVHS), had $10.9 million in sales in 2015. Its cost of goods sold was $4.36 million, and its average inventory balance was $1.77 million. a. Calculate the...
-
Your company had $14 million in sales last year. Its cost of goods sold was $9.8 million and its average inventory balance was $1,300,000. What was its average days of inventory?
-
Your firm purchases goods from its supplier on terms of 1.7/15, net 35. a. What is the effective annual cost to your firm if it chooses not to take the discount and makes its payment on day 35? b....
-
1,600 Balance Sheet The following is a list (in random order) of KIP International Products Company's December 31, 2019, balance sheet accounts: Additional Paid-In Capital on Preferred Stock $2,000...
-
Question 3 4 pts 9 x + 3 x 9 if x 0 Find a) lim f(x), b) lim, f(x), C), lim , f(x) if they exist. 3 Edit View Insert Format Tools Table : 12pt M Paragraph B IV A2 Tv
-
Mr. Geoffrey Guo had a variety of transactions during the 2019 year. Determine the total taxable capital gains included in Mr. Guo's division B income. The transactions included: 1. On January 1,...
Study smarter with the SolutionInn App