Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A Company has equity of $10,000,000 with 100,000 shares of stock,their net earnings are $5,000,000 and they have a PE of 15 times. The stock
A Company has equity of $10,000,000 with 100,000 shares of stock,their net earnings are $5,000,000 and they have a PE of 15 times.
The stock beta is 0.5 and the market return is 12% with a 5% risk premium.
They have $10,000,000 of debt in bonds with a market value at par and a coupon of 6%.
What is the company
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started