Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please show excel calculations XYZ Co has 15,000 shares of common stocks. The stock has a standard deviation of return of 9.39%. A stock market
please show excel calculations
XYZ Co has 15,000 shares of common stocks. The stock has a standard deviation of return of 9.39%. A stock market index has a standard deviation of return of 6.84%. The correlation coefficient between stock return and stock stock index return is 0.93. The stock is expected to pay dividend of $3 in one year and $3 in two years. Its expected price in two years is $60. The risk-free rate is 3%. The stock market index has an expected return of 12%. 6. (a) How much debt relative to total value of debt and equity combined does XYZ have? (b) How much equity relative to total value of debt and equity combined does XYZ have? 7. (a) Determine the weighted average cost of capital of XYZ. XYZ Co has 15,000 shares of common stocks. The stock has a standard deviation of return of 9.39%. A stock market index has a standard deviation of return of 6.84%. The correlation coefficient between stock return and stock stock index return is 0.93. The stock is expected to pay dividend of $3 in one year and $3 in two years. Its expected price in two years is $60. The risk-free rate is 3%. The stock market index has an expected return of 12%. 6. (a) How much debt relative to total value of debt and equity combined does XYZ have? (b) How much equity relative to total value of debt and equity combined does XYZ have? 7. (a) Determine the weighted average cost of capital of XYZ 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