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Question 7 3 pts Suppose ABC Company needs to estimate its cost of equity capital and there is only one other firm in its market.
Question 7 3 pts Suppose ABC Company needs to estimate its cost of equity capital and there is only one other firm in its market. Assuming that the rival firm has a different target debt-equity ratio, which of the following is a plausible way to estimate ABC Company's cost of equity capital? Select all correct answers. Use the rival's all-equity cost of capital and MM Prop II. Use the rival's cost of equity capital directly. Use the rival's unlevered beta to estimate ABC Company's levered beta and then use the security market line. Question 8 3 pts Consider a firm with a 100% dividend payout policy whose current dividend of $10,000 has not yet been paid. If its current stock price is $70 per share and the firm has 1,000 shares outstanding, what will its ex-dividend price be? Question 9 3 pts Suppose a firm has 2 million shares outstanding and its stock sells for $40. The firm issues a rights offer with a subscription price of $20 and wants to raise $5 million in new equity. How many rights would a shareholder need to buy one share of stock
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