Debt 235697 Equity 900238 Beta 105 Risk Free rate 32 7925 1641 8359

# Debt 235697 equity 900238 beta 105 risk free rate 32

This preview shows page 5 - 19 out of 47 pages.

Debt - \$235,697
Equity - \$900,238 Beta – 1.05 Risk Free rate – 3.2% Tax – 25% 20.75% 79.25% 16.41% 83.59% What is the cost of equity provided the following information? Debt - \$178,304 Equity - \$823,049 Beta – .85 Risk Free rate – 2.8% Tax – 25% MRP – 12% 13.00% 9.75% 7.97% 10.62% Provided the following information what is the WACC? Rd – 3.5% Rs –11% T – 25% Wd – 70% Ws – 30% 5.14%
8.49% 6.76% 5.40% What is the weight of debt provided the following information? Debt - \$879,237 Equity - \$1,900,610 Beta - .85 Risk Free rate - 2.7% Tax – 25% 31.63% 25.76% 74.24% 68.37% Provided the following information what is the after tax cost of equity? Rd – 3.7% Rs –9% T – 28% Wd – 35% 9.32% 6.48% 2.66% 9.00% What is the cost of equity provided the following information? Debt - \$235,697 Equity - \$900,238
Beta – 1.05 Risk Free rate – 3.2% Tax – 25% MRP – 10% 7.76% 10.34% 10.28% 13.70% What is the cost of equity provided the following information? Debt - \$178,304 Equity - \$823,049 Beta – .85 Risk Free rate – 2.8% Tax – 25% Rm – 12% 7.97% 6.18% 10.62% 8.24%
d equity)
The y-intercept of the SML line is equal to the ______. Beta Expected Return Market risk premium Risk free rate What is the risk free rate of the following SML? Assume the beta of a firm in question is 1.1 E(r) = 5%+B (9%) 9% 9.90% 5% 14.90% Which of the following is the SML equation? Rd(1-t) WdRd(1-t)+WsRs Rf + B(Rm-Rf) D1/(r-g) The SML graphs the market risk versus the _______. Return on the portfolio Risk associated with the firm stock Return on the market as a whole Risk associated with the portfolio What is the risk free rate of the following SML? Assume the beta of a firm in question is .6 E(r) = 4%+B (9.75%) 4.00% 5.85%
9.75% 9.85% Expected return Risk free rate Beta Return on the market CGM CAPM Market valuation Intrinsic valuation An increase in inflation would tend to move the SML as a ____. Pivot at the y-axis, increasing the slope Parallel shift down Pivot at the y-axis, decreasing the slopePivot at the y-axis, decreasing the slope Parallel shift up If an asset falls below the SML it is considered to be _____. (Assume we have no other information) A good investment A fair investment Not enough information is available. A poor investment An increase in risk aversion would tend to move the SML as a ____. Pivot at the y-axis, increasing the slope Parallel shift up Parallel shift down Pivot at the y-axis, decreasing the slope A firm with a beta of 1.2 would produce an expected return of ______. Assume the SML is equal to 5%+B 12.20% 10.62% 7.25% 6.18% A firm with a beta of .65 would produce an expected return of ______. Assume the SML is equal to 3%+B 8.24% 8.20% 16.41% 6.90% The slope of the line is equal to _______. Beta The market risk premium The risk free rate The expected return The x-intercept is equal to the ______. The SML is mathematically similar to the _____.
B(6%). B(8%)
A public announcement about unfair labor policies is most likely to influence the: Intrinsic value Market value Relative value The announcement will not impact values Which is not a factor included in finding the intrinsic value? Market value Market conditions Expected growth Expected earnings The intrinsic value may change: As a result of new information As analysts expectations change It will not change for an investor As the market value changes Both intrinsic value and market value are not often: Necessary An indication of an investors price The same Different

#### You've reached the end of your free preview.

Want to read all 47 pages?