Green Valley Inc. has a beta of 1.25 and a marginal tax rate of 25%. The expected market return is 15% and the risk-free rate (Treasury security) is 4%. Calculate the firm's cost of internal equity.
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- Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company Forecast return Standard deviation of returns Beta $1 Discount Store Everything $5 12% 8% 1.5 11% 10% 1.0 What should be the expected rate of return for each company, according to the capital asset pricing modelYour estimate of the market risk premium is 5%. The risk-free rate of return is 3%, and General Motors has a beta of 1.7. According to the Capital Asset Pricing Model (CAPM), what is its expected return? A. 11.5% B. 10.4% C. 12.1% D. 10.9%Your estimate of the market risk premium is 8%. The risk−free rate of return is 3.1% and General Motors has a beta of 1.5. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
- You estimate of the market risk premium is 7%. The risk-free rate of return is 3.1% and General Motors has a beta of 1.9. According to the Capital Asset Pricing Model (CAPM), what is its expected return?NewLinePhone Corp. is very risky, with a beta equal to 2.8 and a standard deviation of returns of 32%. The risk-free rate of return is 3% and the market risk premium is 8%. NewLinePhone's marginal tax rate is 35%. Use the capital asset pricing model (CAPM) to estimate NewLinePhone's cost of retained earnings. (*You must show your calculation process as well.)Hampton Corporation has a beta of 1.3 and a marginal tax rate of 34%. The expected return on the market is 11% and the risk-free interest rate is 4%. Estimate the firm’s cost of internal equity.
- DraftKings Inc (DKNG) has a capital structure of 29% debt and 71% equity. The expected return on the market is 7.65%, and the risk-free rate is 2.41%. What discount rate should an analyst use to calculate the NPV of a project with an equity beta of 1.22 if the firm’s after-tax cost of debt is 4.26%? A. 3.15% B. 5.18% C. 7.49% D. 9.01%A. CALCULATE the cost of equity capital of H Ltd., whose risk-free rate of return equals 10%. The firm's beta equals 1.75 and the return on the market portfolio equals to 15%. B. The current ratio of H Ltd is 5:1 and standard current ratio given by accounting bodies is 2:1? Do you think that H Ltd should try to reduce its current ratio?I need this question answer general accounting
- Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company $1 Discount Store Everything $5 Forecasted return 12% 11% Standard deviation of returns 8% 10% Beta 1.5 1.0 What would be the fair return for each company according to the capital asset pricing model (CAPM)?The current risk-free rate of return (rRf) is 4.67% while the market risk premium is 5.75%. The Burris Company has a beta of 0.92. Using the capital asset pricing model (CAPM) approach, Burris’s cost of equity is? A 9.96 B) 8.964 C) 11.952 D) 10.458Here are data on two companies. The T-bill rate is 5.6% and the market risk premium is 7.1%. $1 Discount Store Everything $5 13% 18% Company Forecast return. Standard deviation of returns Beta Company $1 Discount Store Everything $5 Expected Return 14% 16% Required: What would be the expected rate of return for each company, according to the capital asset pricing model (CAPM)? (Round your answers to 2 decimal places.) % % 1.6 1.0