Question
QUESTION 32 Suppose you are trying to estimate the cost of equity for a firm as part of the calculation of the Weighted Average Cost
QUESTION 32
Suppose you are trying to estimate the cost of equity for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). If the risk-free rate is 4.7%, the expected market risk premium is 5.3%, and the beta is 1.4 for this firm's equity, what would be the expected cost of equity for this firm using CAPM? (Answer to the nearest tenth of a percent, but do not use a percent sign).
QUESTION 33
Suppose you are trying to estimate the after tax cost of equity for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). If the risk-free rate is 4.5%, the expected market risk premium is 5.4%, the beta is 1.9 for this firm's equity, and the corporate tax rate is 39%, what would be the expected after tax cost of equity for this firm using CAPM? (Answer to the nearest tenth of a percent, but do not use a percent sign).
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Small Brewery Finance
Authors: Maria Pearman
1st Edition
1938469526, 978-1938469527
