# hw15 - 1 d1=d0(1 g => 2.45(1.06)=>2.60 r=(d1/p g...

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1: d1=d0(1+g) => 2.45(1.06)=>2.60 r=(d1/p)+g => (2.60/45)+.06 = .1178 2: R equity = R risk free + beta(expected return – risk free) = .045+ 1.3(.12-.045) =.1425 3: using first two problem as a guide. d1=d0(1+g) => 1.80(1+.05) =1.89 r=(d1/p)+g => (1.89/34)+.05 = .1056 R equity = R risk free + beta(market risk premium) = .04+1.15(.08) = .132 (.1056+.132)/2= .1188 4; div percentage change .78 .91 (.91-.78)/.78 = .1667 .93 (.93-.91)/.91 = .022 1.00 (1-.93)/.93 = .0753 1.22 (1.22-1)/1 = .22 Average = (.1667+.022+.0753+.22)/4 =.1210 Cost of equity using average = 1.22(.1210)/45 + .1210 = .1243 5; p=d/r => 6/92 =.0652 6; n = 12* 2 = 24; i/y= ? ; pv = 1050; pmt=(1000*.08)/2=40; fv=1000 i/y= 3.68%*2 =7.37% after-tax cost of debt => Rd(1-Tc) - .0737(1-.35)=4.79% 7: a) n = 60; i/y=?; pv=1080; pmt=(1000*.1)/2=50; fv=1000 4.6%*2= 9.21% b) after tax cost of debt => Rd(1-tc) => .0921(1-.35) = 5.99% 9; WACC = Rcs(Wcs)+Rps(Wps)+Rbond(Rbond)(1-Tc) =>.5(.16 )+.05(.075 ) + .45( .09)(1-.35) => .08+.0038+.0263 = .1101

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• Spring '08
• CARNEY
• Weighted mean, market risk premium, div percentage change, 47.5M +135M =182.5M, 503.5M+127.65M =631.15M e/v=

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hw15 - 1 d1=d0(1 g => 2.45(1.06)=>2.60 r=(d1/p g...

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