Question
Medtronic is listed in NYSE and in 2017, it has maturity risk premium of 4%, default risk premium is 3%, cash flow risk premium
Medtronic is listed in NYSE and in 2017, it has maturity risk premium of 4%, default risk premium is 3%, cash flow risk premium is 1.5%, bankruptcy risk premium is 2%, illiquidity risk premium is 1%, real interest rate is 2%, inflation rate is 1%, and beta is 1.4. Assume in 2017, S&P 500 return is 20%, return from NASDAQ is 15%, and return from NYSE is 17%. All numbers are in annualized term. What is Medtronic's cost of equity and cost of debt, respectively. 19.8% and 10% O 26.8% and 11% O 22.6% and 10.5% O 22.6% and 11%
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Elementary Statistics
Authors: Neil A. Weiss
8th Edition
321691237, 978-0321691231
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