FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A firm has an equity beta of 1.2,the risk free rate is 3.4 percent, the market return is 15.7 percent and the pretax cost of

A firm has an equity beta of 1.2,the risk free rate is 3.4 percent, the market return is 15.7 percent and the pretax cost of debt is 0.4 percent. the debt equity ratio is.47. if you apply the common beta assumption, what is the firms as firm asset beta?

Step by Step Solution

★★★★★

3.31 Rating (157 Votes )

There are 3 Steps involved in it

Step: 1

Asset 11 be fel equity b... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective

Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective

Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw

7th Edition

9780324789423, 324789416, 978-0324789416

More Books

Students also viewed these Finance questions

Question

★★★★★
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...

Answered: 1 week ago

Question

★★★★★
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...

Answered: 1 week ago

Question

★★★★★
EBIT is 22.000, taxes 34%, depreciation is 30.000. What is the operating cash flow? Anthony operates a part time auto repair service. He estimates that a new diagnostic computer system will result...

Answered: 1 week ago

Question

★★★★★
The Come-On-In company produces two types of entrance doors: Standard and Deluxe.The allocation base for indirect manufacturing costs has been direct labor hours.For 2016, the company completed the...

Answered: 1 week ago

Question

★★★★★
The Henry Street Mission uses volunteers to assemble care packages for needy families during the holiday season. The mission would like to organize the work as efficiently as possible. A list of...

Answered: 1 week ago

Question

★★★★★
In cases where viscous stresses and thermal conduction can be neglected, the Euler equations describe the motion of a fluid. The one dimensional form of the Euler equations (mass, momentum, and...

Answered: 1 week ago

Question

★★★★★
describe the two basic forms of functional social support;

Answered: 1 week ago

Question

★★★★★
Jane Marks has a restaurant in which she accepts credit cards and checks. Several of the places that Jane shops now accept debit cards and do not accept checks. Jane's banker explained that a debit...

Answered: 1 week ago

Question

★★★★★
Statement of Cash FlowsIndirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $206 $66...

Answered: 1 week ago

Question

★★★★★
For 2021, Essence Company, a calendar year taxpayer, will change from the cash method for tax purposes to the accrual method. At the end of 2020, Essence showed the following items. Accounts...

Answered: 1 week ago

Question

★★★★★
The itemized deductions of taxpayers in high-income brackets will be limited to the lesser of 6% of the excess of adjusted gross income over the threshold amount or 80% of the amount of itemized...

Answered: 1 week ago

Question

★★★★★
Title something descriptive, like "Robin covers Maintenance and Supply Chain Management." Analyze Operations Management decisions. 1. Location Strategy; 2. Scheduling...

Answered: 1 week ago

Question

★★★★★
Watch https://www.youtube.com/watch?v=coSyGQI28eM&t=77s and answer the following question: What are the 3 main types of private insurance plans? Watch Define the following terms (cite any web...

Answered: 1 week ago

Question

★★★★★
5. from the following data, obtain Y as a linear function of x using the 199 method of least squares. Then plot the corresponding relationship and the mis data points. C. 16 fignal is cut 200 Intuin...

Answered: 1 week ago

Question

★★★★★
Corporate Governance FOR NETFLIX: Corporate governance pursues integrative approaches to systems of governance, which controls how the organizations operates internally and externally. It uses...

Answered: 1 week ago

Question

★★★★★
Plot the 3D Mohr's circle for the stress state where n=0 and determine the principal stresses , graphically or otherwise. Plot the 3D Mohr's circle for the stress state where n=2 and determine the...

Answered: 1 week ago

Question

★★★★★
Quatro Company issues bonds dated January 1 , 2 0 2 1 , with a par value of $ 7 1 0 , 0 0 0 . The bonds' annual contract rate is 9 % , and interest is paid semiannually on June 3 0 and December 3 1 ....

Answered: 1 week ago

Question

★★★★★
Record the following selected transactions for March in a two-column journal, identifying each entry by letter: (a) Received $10,000 from Shirley Knowles, owner. (b) Purchased equipment for $35,000,...

Answered: 1 week ago

Question

★★★★★
Access the investor relations or corporate information section of the websites of Dollar General (www.dollargeneral.com) and Macy's Inc. (www.macysinc.com). Study the strategies of each firm. Examine...

Answered: 1 week ago

Question

★★★★★
In what sense is the interest coverage ratio more a measure for assessing short-term liquidity risk than it is a measure for assessing long-term solvency risk?

Answered: 1 week ago

Question

★★★★★
Caterpillar manufactures heavy machinery and equipment and provides financing for purchases by its customers. Caterpillar reported sales and interest revenues of $51,324 million for 2008. The balance...

Answered: 1 week ago

Question

★★★★★
The National Highway Transportation Safety Administrations National Center for Statistics and Analysis released its Vehicle Survivability Travel Mileage Schedules in January 2006. One item...

Answered: 1 week ago

Question

★★★★★
A previous exercise discussed the relationship between the average college tuition (in 2003 dollars) for private and public colleges. The data indicated in the article follow: Period 19831984...

Answered: 1 week ago

Question

★★★★★
Gym Outfitters sells and services exercise equipment such as treadmills, ellipticals, and stair climbers to gymnasiums and recreational centers. The companys management would like to determine if...

Answered: 1 week ago

Previous Question Next Question