### What overall venture investment discount rate would be used

Assignment Help Finance Basics
##### Reference no: EM131123710

Use the following information to estimate the VentureBanc investors' target rate of return:
RATE COMPONENT RETURN
COMPONENT

Risk-free rate .............. 6%

A. VentureBanc uses a systematic risk measure of 2.0. Based on the information shown, estimate VentureBanc's investment risk premium. Then estimate the cost of equity capital for VentureBanc.

B. Determine the rate components and their returns that a venture investor like VentureBanc would require to be covered beyond a traditional cost-of-equity estimate.

C. What overall venture investment discount rate would be used by VentureBanc?

#### Calculate the expected rate of return before consider premim

A. Calculate the expected rate of return before considering premiums for illiquidity, advisory activities, and hubris projections. B. Estimate the hubris projections premium f

#### Calculate the dollar amount that sureway venture investors

A. Calculate the dollar amount that SureWay venture investors would lend to Jerry’s Tree Services. B. What would be the dollar amount of the loan if the loan is made for only

#### Calculate the percentage rate of return for each of venture

A. Calculate the percentage rate of return for each of the venture investments. B. Calculate the expected rate of return for a portfolio of these three venture investments wei

#### Calculate the percentage rate of return for each investment

Calculate the percentage rate of return for each of the venture investments. Calculate the expected rate of return for a portfolio of these three venture investments weighted

#### What is the default risk premium on one year bank loans

A. What is the amount of the maturity risk premium on one-year versus five-year U.S. government securities? B. What is the amount of the maturity risk premium on one-year vers

#### What is the inflation premium expected at this time

A. If the real rate of interest is expected to be 3 percent annually, what is the inflation premium expected at this time? B. What is the amount of the total risk premium that

#### Explain why the types are listed in the order you give

From the Headlines—Lovely Confections: List three types of financing employed by Lovely Confections in order of increasing required returns. Explain why the types are listed i

#### How do we estimate the cost of equity capital for private

How do we estimate the cost of equity capital for private ventures? In developing your answer, describe the major components that are considered when estimating the rates of r

### Write a Review 