Question
Suppose Tesla's asset beta is 1.2, its D/E (debt-equity ratio) is 1.5 and the US EMRP is 6%. If the 10 Year US Treasury rate
Suppose Tesla's asset beta is 1.2, its D/E (debt-equity ratio) is 1.5 and the US EMRP is 6%. If the 10 Year US Treasury rate is expected to be 2% in the foreseeable future, what should be the financial risk premium on Tesla shares? Assume a 21% corporate tax rate.
|
| 5.20% |
|
| 6.00% |
|
| 8.53% |
|
| 10.00% |
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Investment Science
Authors: David G. Luenberger
1st Edition
0195108094, 978-0195108095
