BigBang Inc is raising $100MM in equity capital (representing 100% ownership of the firm). BigBank is telling potential investors that it plans to invest the $100MM in assets it expects to grow by 14.2% in 1.5 years. At this time (1.5 years from now), Bigstuff will exit all its investments pay its owners all the proceeds and close down. What is BigBang's cost of equity capital, re? Round your answer to three decimal places. Do not represent your answer as a percent. IE: write 0.072 not 7.2%

BigBang Inc is raising $100MM in equity capital (representing 100% ownership of the firm). BigBank is telling potential investors that it plans to invest the $100MM in assets it expects to grow by 14.2% in 1.5 years. At this time (1.5 years from now), Bigstuff will exit all its investments pay its owners all the proceeds and close down. What is BigBang's cost of equity capital, re? Round your answer to three decimal places. Do not represent your answer as a percent. IE: write 0.072 not 7.2%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 6MC

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Question

BigBang Inc is raising $100MM in equity capital (representing 100% ownership of the firm).
BigBank is telling potential investors that it plans to invest the $100MM in assets it expects to grow
by 14.2% in 1.5 years. At this time (1.5 years from now), Bigstuff will exit all its investments pay its
owners all the proceeds and close down.
What is BigBang's cost of equity capital, re?
Round your answer to three decimal places. Do not represent your answer as a percent. IE: write
0.072 not 7.2%

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