4. According to CAPM estimates, what is the cost of equity for a firm with beta of 1.5 when the risk- free interest is 6% and the expected return on the market portfolio is 15%? 5. CC Company's 5-year bonds are selling at P820. The bonds face amount is P1,000 and pays an annual interest rate of 6%. CC's tax rate is at 30%. What is CC's cost of debt?
4. According to CAPM estimates, what is the cost of equity for a firm with beta of 1.5 when the risk- free interest is 6% and the expected return on the market portfolio is 15%? 5. CC Company's 5-year bonds are selling at P820. The bonds face amount is P1,000 and pays an annual interest rate of 6%. CC's tax rate is at 30%. What is CC's cost of debt?
Chapter12: The Cost Of Capital
Section: Chapter Questions
Problem 7P
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Topic: Cost of Capital
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![4. According to CAPM estimates, what is the cost of equity for a firm with beta of 1.5 when the risk-
free interest is 6% and the expected return on the market portfolio is 15%?
5. CC Company's 5-year bonds are selling at P820. The bonds face amount is P1,000 and pays an
annual interest rate of 6%. CC's tax rate is at 30%. What is CC's cost of debt?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04d6c9ae-dc9e-453d-bb2e-92d2618f0645%2F71a2020b-197b-41a3-8666-5c10e41754cb%2Futzpj4r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. According to CAPM estimates, what is the cost of equity for a firm with beta of 1.5 when the risk-
free interest is 6% and the expected return on the market portfolio is 15%?
5. CC Company's 5-year bonds are selling at P820. The bonds face amount is P1,000 and pays an
annual interest rate of 6%. CC's tax rate is at 30%. What is CC's cost of debt?
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