Question
Suppose you borrow $52350.96M when financing a gym with a cost of $94902.96M. You expect to generate a cash flow of $79393.37M at the end
Suppose you borrow $52350.96M when financing a gym with a cost of $94902.96M. You expect to generate a cash flow of $79393.37M at the end of the year if demand is weak, $89096.42M if demand is as expected and $107276.29M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 5.08% (risk of debt) and there's a 9.46% risk premium for the risk of the assets. What would be the realized return of equity if the demand is strong?
answers in Percentages. E.G. for 10.15% you must enter 10.15, for 2.05% you must enter 2.05, etc.
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