Free cash flow is a Select one: a. value reallocation concept b. value destruction concept C. value distribution concept d. value creation concept Alpha Inc., Beta Inc. and Gamma Inc. are three companies with shares listed in the stock exchanges in Italy, France and Greece respectively. An analyst collects the following information about the three companies. Company Beta Risk-free rate Alpha Inc. 0.74 4.90% Beta Inc. 1.00 6.00% Gamma Inc. 1.07 4.75% The US equity risk premium is 4%. What is the estimate for Alpha Inc.'s cost of equity capital?
Free cash flow is a Select one: a. value reallocation concept b. value destruction concept C. value distribution concept d. value creation concept Alpha Inc., Beta Inc. and Gamma Inc. are three companies with shares listed in the stock exchanges in Italy, France and Greece respectively. An analyst collects the following information about the three companies. Company Beta Risk-free rate Alpha Inc. 0.74 4.90% Beta Inc. 1.00 6.00% Gamma Inc. 1.07 4.75% The US equity risk premium is 4%. What is the estimate for Alpha Inc.'s cost of equity capital?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Free cash flow is a
Select one:
a. value reallocation concept
b. value destruction concept
C. value distribution concept
d. value creation concept](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0301c085-130c-469a-8732-8d67d5bd8057%2F775cc310-6d88-4b75-b03a-a96b8ddbe021%2Frp3tl0qf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Free cash flow is a
Select one:
a. value reallocation concept
b. value destruction concept
C. value distribution concept
d. value creation concept
![Alpha Inc., Beta Inc. and Gamma Inc. are
three companies with shares listed in the
stock exchanges in Italy, France and
Greece respectively. An analyst collects the
following information about the three
companies.
Company Beta Risk-free rate
Alpha Inc.
0.74
4.90%
Beta Inc. 1.00
6.00%
Gamma Inc. 1.07
4.75%
The US equity risk premium is 4%. What is
the estimate for Alpha Inc.'s cost of equity
capital?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0301c085-130c-469a-8732-8d67d5bd8057%2F775cc310-6d88-4b75-b03a-a96b8ddbe021%2Fw42ux64_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Alpha Inc., Beta Inc. and Gamma Inc. are
three companies with shares listed in the
stock exchanges in Italy, France and
Greece respectively. An analyst collects the
following information about the three
companies.
Company Beta Risk-free rate
Alpha Inc.
0.74
4.90%
Beta Inc. 1.00
6.00%
Gamma Inc. 1.07
4.75%
The US equity risk premium is 4%. What is
the estimate for Alpha Inc.'s cost of equity
capital?
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