Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 11, 2024

What is the cost of equity using the Capital Asset Pricing Model (CAPM) if the risk free rate is 8.6%, the beta is 0.9 and

What is the cost of equity using the Capital Asset Pricing Model (CAPM) if the risk free rate is 8.6%, the beta is 0.9 and the equity risk premium is 5%?

a. 13.6%

b. 12.74%

c. 12.13%

d. 13.1%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Mortgage Backed Securities

Authors: Frank Fabozzi

6th Edition

0071460748, 978-0071460743

More Books

Students also viewed these Finance questions

Question

★★★★★

Use part (a) to prove Theorem 3 in the case that A is invertible.

Answered: 1 week ago

Question

★★★★★

Participants in a study of honesty in online dating profiles were recruited through print and online advertisements in the Village Voice, one of New York Citys most prominent weekly newspapers, and...

Answered: 1 week ago

Question

★★★★★

48. Newly purchased tires of a certain type are supposed to be lled to a pressure of 30 lb/in2. Let m denote the true average pressure. Find the P-value associated with each given z statistic value...

Answered: 1 week ago

Question

★★★★★

MPG, Inc., accountants have developed the following data from the companys accounting records for the year ended April 30, 2012: (a) Purchase of plant assets, $59,400. (b) Cash receipt from issuance...

Answered: 1 week ago

Question

★★★★★

What is the cost of equity using the Capital Asset Pricing Model (CAPM) if the risk free rate is 8.6%, the beta is 0.9 and the equity risk premium is 5%? a. 13.6% b. 12.74% c. 12.13% d. 13.1%

Answered: 1 week ago

Question

★★★★★

Cash flow from assets. Use the data from the following financial statements in the popup window, The company paid interest expense of $17,700 for 2017 and had an overall tax rate of 40% for 2017....

Answered: 1 week ago

Question

★★★★★

Decode the string below and then find the appropriate substitution cipher to decode thephrasebelow and find the flag. JBNFIUBNGYYDMMZTGEZAU=== Find the appropriate substitution cipher to decode...

Answered: 1 week ago

Question

★★★★★

The Children\'s Foundation enters into a contract with The Lively Group. The contract obligates The Children\'s Foundation to deliver a specified amount of cash to The Lively Group if a specified...

Answered: 1 week ago

Question

★★★★★

Solve question 1 Q-5) Consider the following more complex regression (4 points) [Do not forget to create a dummy variable for marital] SUMMARY OUTPUT SUMMARY OUTPUT Regression Statistic Regression...

Answered: 1 week ago

Question

★★★★★

A sphere of radius R = 0.315 m and uniform charge density 151 nC/m lies at the center of a spherical, conducting shell of inner and outer radii 3.50R and 4.00R, respectively. The conducting shell...

Answered: 1 week ago

Question

★★★★★

The yards per carry of 20 randomly selected college football running backs are listed below. Assume the yards per carry are normally distributed. Use two decimal places in all numerical answers. 2.8,...

Answered: 1 week ago

Question

★★★★★

Confusion surrounding compensation and benefits, with a lack of information and benchmarking. Comparative data for benchmarking needs to be collected and disseminated.

Answered: 1 week ago

Question

★★★★★

1 What are the main problem areas in the GermanCzech joint venture of VolkswagenSkoda described above, and how can they be accounted for by reference to differences in culture? What part is played by...

Answered: 1 week ago

Question

★★★★★

A disregard for health and safety management. Managers can be encouraged to take a proactive approach to these issues, and a holistic approach that ties in these issues with the companys...

Answered: 1 week ago

Previous Question Next Question