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Needing help with question 8.20 and 8.21 in the attached spreadsheet. Chapter 8 Problem 20 Key facts and assumptions concerning Kroger Company, at December 12,
Needing help with question 8.20 and 8.21 in the attached spreadsheet.
Chapter 8 Problem 20 Key facts and assumptions concerning Kroger Company, at December 12, 2007, appear below. Using this informa the questions following. Facts and Assumptions Yield to maturity on long-term government bonds Yield to maturity on company long-term bonds Coupon rate on company long-term bonds Market price of risk, or risk premium Estimated company equity beta Stock price per share $ Number of shares outstanding Book value of equity $ Book value of interest-bearing debt $ Tax rate 4.54% 6.32% 7.50% 6.30% 1.05 25.97 681.2 million 4,965 million 6,674 million 35.0% a. Estimate Kroger's cost of equity capital. b. Estimate Kroger's weighted-average cost of capital. Prepare a spreadsheet or table showing the relevant va Chapter 8 Problem 21 Information regarding Kroger Company, and four industry competitors is shown below, on Decem Company Kroger Company Safeway Inc. Supervalu Inc. Whole Foods Markets Winn Dixie Stores Inc. Equity Interest-Bearing beta Debt 1.05 $ 6,674.0 0.49 5,897.9 1.17 8,936.0 1.16 760.9 2.56 160.1 a. Estimate the industry asset beta, weighting each company by its proportion of total market value of equity. Relever the industry asset beta to reflect Kroger's capital structure, and to make another (industry-informed b. Kroger's equity beta. ar below. Using this information, answer able showing the relevant variables. shown below, on December 12, 2007. Market value equity $ 17,690.8 15,236.3 8,054.3 5,762.1 916.8 . total market value of equity. e another (industry-informed) estimate ofStep by Step Solution
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