Question
The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a companys cost of
The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a companys cost of internal equity. Kennedys bonds yield 11.52%, and the firms analysts estimate that the firms risk premium on its stock over its bonds is 3.55%. Based on the bond-yield-plus-risk-premium approach, Kennedys cost of internal equity is:
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Corporate Finance For Dummies
Authors: Michael Taillard
1st Edition
1118412796, 978-1118412794
