Question
Hello these are Accounting questions please answer the questuins and show me your work and how you get the answer as soon as possible Q1)
Hello these are Accounting questions
please answer the questuins and show me your work and how you get the answer as soon as possible
Q1)
Assume that a company has a beta of .85 and the risk-free rate is 4%. If the market risk premium is 8% calculate cost of equity capital, using the capital asset pricing model.
Select one:
A. 12.88%
B. 8.00%
C. 6.80%
D. 10.80%
Q2)
Determine the present value of an 8 year annuity that pays $11,000 at the end of each year discounted at a rate of 6%.
Select one:
A. $69,015
B. $66,000
C. $88,000
D. $68,308
Q3)
George forecasts a $1.00 dividend for 2017, $1.10 dividend for 2018 and a $1.20 dividend for 2019 for Mikayla Corporation. For all years after 2019, George forecasts that Mikayla Corporation will pay a $1.30 dividend. Using the dividend discount valuation model, determine the intrinsic value of Mikayla Corporation, assuming the companys cost of equity capital is 8%.
Select one:
A. $18.33
B. $15.72
C. $16.25
D. $14.57
Q4)
The following data pertains to Radek Corp., a manufacturer of office supplies. Dollar amounts in thousands.
Total assets | $8,731 |
Interest-bearing debt | $4,239 |
Average borrowing rate for debt | 10.0% |
Common equity: |
|
Book value | $3,130 |
Market value | $16,284 |
Marginal income tax rate | 35% |
Market equity beta | 1.33 |
Assuming that the risk-free rate is 5.3% and the market risk premium is 7.3%, calculate Radek's cost of equity capital, using the capital asset pricing model.
Select one:
A. 14.35%
B. 15.01%
C. 9.71%
D. 7.05%
Q5)
The following data pertains to Radek Corp., a manufacturer of office supplies. Dollar amounts in thousands.
Total assets | $8,731 |
Interest-bearing debt | $4,239 |
Average borrowing rate for debt | 10.0% |
Common equity: |
|
Book value | $3,130 |
Market value | $16,284 |
Marginal income tax rate | 35% |
Market equity beta | 1.33 |
Calculate Radek's cost of debt capital.
Select one:
A. 10.00%
B. 6.50%
C. 3.50%
D. 13.30%
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