Question
The total market value of Okefenokee Real Estate Company's equity is $6 million, and the total value of its debt is $4 million. The treasurer
| The total market value of Okefenokee Real Estate Company's equity is $6 million, and the total value of its debt is $4 million. The treasurer estimates that the beta of the stock currently is 0.5 and that the expected risk premium on the market is 10%. The Treasury bill rate is 3%. |
| a. | What is the required rate of return on Okefenokee stock? |
| Required rate of return | % |
| b. | What is the beta of the company |
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Governance Of Financial Management
Authors: John Carver, Miriam Carver
1st Edition
0470392541, 9780470392546
