A REIT has an expected total return on equity of 15%, interest on their debt is 9%, and their debt-to-total-value ratio is 50%. What is the REIT's average cost of capital? a. 12.2%. b. 10.4%. c. 12.6%. d. 12.0%.
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- Financial accounting question6. Calculate and explain the Weighted Average Cost of Capital (WACC)based on the details below.a. Market Value of Equity: $7Mb. Market Value of Debt: $3Mc. Cost of equity 7%d. Cost of debt: 5%e. Tax Rate: 32 (use .32 for calculation)g. Calculate Pi in each of the following instances: a. Div Yield % = 6%, Total Return % = 16%, Po = $10 b. Capital Gain% = 8%, Div Yield % = 5%, D1 = $3 c. Capital Gain % = 10%; Do = $2; growth = 4%; Po = $40
- firm with a debt ratio of 0.75, will have an equity multiplier of ____. a. 0.25 b. 4.00 c. 0.75 d. 1.00Gates Appliances has a return-on-assets (investment) ratio of 20 percent. a. If the debt-to-total-assets ratio is 25 percent, what is the return on equity? (Input your answer as a percent rounded to 2 decima) places.) b. If the firm had no debt, what would the return-on-equity ratio be? (Input your answer as a percent rounded to 2 decimal places.)The Tree House has a pretax cost of debt of 6.1 percent and a return on assets of 10.4 percent. The debt–equity ratio is .39. Ignore taxes. What is the cost of equity?
- Below, inputs have been arrived for the XYZ company. Using CAPM calculate its cost of equity. (Observe 2 decimal places)1. Using the Capital Asset Pricing Model (CAPM), what's this company's cost of common equity? ·Expected market return = 10% Risk-free rate = 4% Beta = 1.3The Tree House has a pretax cost of debt of 6.2 percent and a return on assets of 10.6 percent. The debt–equity ratio is .40. Ignore taxes. What is the cost of equity? Multiple Choice 12.98% 8.84% 12.76% 13.48% 12.36%
- What is the return on equity?Two capital assets display the following: E(RA) = 12% σA = 1.5% E(RB) = 15% σB = 1.0% If asset A´s return is 5% below the Capital Market Line (CML), and asset B´s return is 1% below the CML, what is the equation of the CML? a) E(Ri) = 0.1203 − 0.02σi b) E(Ri) = 0.09 + 2σi c) E(Ri) = 0.1227 + 0.02σi d) E(Ri) = 0.15 − 2σi e) E(Ri) = 0.14 + 2σiAn insurance company’s projected loss ratio is 77.5 percent, and its expense ratio is 23.9 percent. It estimates that dividends to policyholders will add another 5 percent. What is the minimum yield on investments required in order to maintain a positive operating ratio?