Question

The Up and Coming Corporation's common stock has a beta of 1. If the risk-free rate...

The Up and Coming Corporation's common stock has a beta of 1. If the risk-free rate is 3 percent and the expected return on the market is 15 percent, what is the company's cost of equity capital? (Do not round your intermediate calculations.)

18%

15%

15.75%

14.25%

15.6%

*If possible, could you solve in excel and show the formulas? Thank you!

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Calculation is shown below

Working is shown below

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
AA Corporation's stock has a beta of 0.9. The risk-free rate is 3%, and the expected...
AA Corporation's stock has a beta of 0.9. The risk-free rate is 3%, and the expected return on the market is 9%. What is the required rate of return on AA's stock? Do not round intermediate calculations. Round your answer to one decimal place.
Juvani has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and...
Juvani has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and the required return on the market portfolio is 18 percent. The company plans to pay a dividend of $2.45 per share in the coming year and anticipates that its future dividends will increase at an annual rate as follow; D2017= 2,32, D2016= 2.12, D2015=2.30. what is the price of Juvani stock Please Solve As soon as Solve quickly I get you two UPVOTE directly...
Blossom Industries common stock has a beta of 1.2. If the market risk-free rate is 4.6...
Blossom Industries common stock has a beta of 1.2. If the market risk-free rate is 4.6 percent and the expected return on the market is 9.1 percent, what is Blossom’s cost of common stock? (Round answer to 1 decimal places, e.g. 15.2%.) Cost of common stock %
Cost of common stock equity--CAPM Netflix common stock has a​ beta, b​, of 0.6. The​ risk-free...
Cost of common stock equity--CAPM Netflix common stock has a​ beta, b​, of 0.6. The​ risk-free rate is 6 %​, and the market return is 12​%. a. Determine the risk premium on Netflix common stock. b. Determine the required return that Netflix common stock should provide. c. Determine​ Netflix's cost of common stock equity using the CAPM.
Company Y has common stock beta 1.4. Risk free rate is 5% and market risk premium...
Company Y has common stock beta 1.4. Risk free rate is 5% and market risk premium is 8%. Company Y cost of debt is 5,4%. Company tax rate is 35%. Debt to equity ratio is 0.6. Calculate E/V ratio. Express your answer as %.
Stock ABC has beta of 1.2. The risk-free rate is 5%, and the market expected rate...
Stock ABC has beta of 1.2. The risk-free rate is 5%, and the market expected rate of return is 14%. My estimation shows that the stock of ABC has alpha of 3% over a one-year period horizon. I have $20,000 in my account and I also want to use “buy on margin” as well to buy ABC as much as possible. Initial margin requirement is 50% and I am supposed to pay back 5% annually compounded interest on it. How...
The company's stock has a beta equal to 1.22 , the risk-free rate is 4.5 percent,...
The company's stock has a beta equal to 1.22 , the risk-free rate is 4.5 percent, and the market risk premium is 7.0 percent. What is your estimate of the stock's required rate of return? Answer in a percentage without the % sign, and round it to two decimal places, i.e., 10.54 for 10.54% (or 0.1054). A company has just paid a dividend of $ 3 per share, D0=$ 3 . It is estimated that the company's dividend will grow...
The current risk-free rate is 4 percent and the market risk premium is 5 percent. You...
The current risk-free rate is 4 percent and the market risk premium is 5 percent. You are trying to value ABC company and it has an equity beta of 0.9. The company earned $3.50 per share in the year that just ended. You expect the company's earnings to grow 4 percent per year. The company has an ROE of 11 percent. What is the value of the stock? Do not round intermediate calculations. Round your answer to the nearest cent....
The current risk-free rate is 3 percent and the market risk premium is 5 percent. You...
The current risk-free rate is 3 percent and the market risk premium is 5 percent. You are trying to value ABC company and it has an equity beta of 0.7. The company earned $2.00 per share in the year that just ended. You expect the company's earnings to grow 3 percent per year. The company has an ROE of 13 percent. What is the value of the stock? Do not round intermediate calculations. Round your answer to the nearest cent....
The current risk-free rate is 2 percent and the market risk premium is 3 percent. You...
The current risk-free rate is 2 percent and the market risk premium is 3 percent. You are trying to value ABC company and it has an equity beta of 0.7. The company earned $3.50 per share in the year that just ended. You expect the company's earnings to grow 2 percent per year. The company has an ROE of 12 percent. What is the value of the stock? Do not round intermediate calculations. Round your answer to the nearest cent....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT