Berta industries stock has a beta

Assignment Help Financial Management
Reference no: EM13720387

Berta Industries stock has a beta of 1.30. The company just paid a dividend of $0.30, and the dividends are expected to grow at 4 percent. The expected return on the market is 13 percent, and Treasury bills are yielding 6.0 percent. The most recent stock price for Berta is $77. 

a.  Calculate the cost of equity using the DCF method. (Round your answer to 2 decimal places.

DCF method % 

b.  Calculate the cost of equity using the SML method. (Round your answer to 2 decimal places.

SML method %

 

Reference no: EM13720387

Questions Cloud

The interrupt vector table : The interrupt vector table is always created in the first 1K area of the memory. Justify the statement.
Find the moment of resistance of beam section : A rectangular beam of size 40mm*60mm is subjected to bending. the maximum bending stress is limited to 75N/mm^2. find the moment of resistance of beam section.
What is the price of the bonds : Will the bonds be selling at a premium or a discount with respect to their $1000 face value? Why and what is the price of the bonds?
Theories relate to the ethnomedical practices : CAM theories and pratices are being used today by majority of people these days. These theories relate to the ethnomedical practices, which is the study of traditional branches of medicine which may or may not have related written text. These prac..
Berta industries stock has a beta : Berta Industries stock has a beta of 1.30. The company just paid a dividend of $0.30, and the dividends are expected to grow at 4 percent. The expected return on the market is 13 percent, and Treasury bills are yielding 6.0 percent. The most recen..
Research on dell corporation and hewlett packard : Research Dell Corporation and Hewlett Packard. Analyze each company's competitive strategy. Are they really in competition with each other? If so, how? Which company is the better competitor? Why? Which has the best chance for a successful future?..
Find the slope of given line : Equation may be written T2 (4Π -2 /g)L, which is a straight line through the origin if T2 is plotted versus L. Draw a straight line best fitting the data. Find the slope of this line, equate it to 4σ2/g and solve for g
Provide a self-analysis : Describe the key responsibilities of one of these roles in the sector based on your interview -
Examine both the positive and negative effects : Adiscussion question,Examine both the positive and negative effects that the company in question experienced. Suggest two (2) actions that the company could have taken in order to mitigate the impact of the lawsuit on the company's business operat..

Reviews

Write a Review

Financial Management Questions & Answers

  Profitability ratios trading on the equity digital relay

profitability ratios trading on the equity. digital relay has both preferred and common stock outstanding. the

  A financial planning organization

May an attorney allow a financial planning organization to refer its members to him for preparation of wills and trusts and accept payment of part or all of his fee from the organization?

  State free cash flows are expected to grow at constant rate

Estimate the fair market value of Walleye Feeders at the end of 2012. Assume that after 2015, free cash flows are expected to grow at a constant rate of 12.5% and Walleye Feeders' weighted-average cost of capital is 14 percent.

  Conduct a gap analysis for anthonys orchard

Conduct a gap analysis for Anthony's Orchard and devise a benchmarking review for Anthony's Orchard. To do this, discuss recommended strategies and measures that will be useful to measure progress towards the objective in your gap analysis.

  Assuming that the executive leadership includes several

assuming that the executive leadership includes several former accountants how would the organizational goals influence

  Incremental cash flows

Discuss qualitatively how you might have incorporated the likely growth of digital photography in the sales projections developed above?  (Remember hindsight is 20-20.)

  Explain what happens to the market rate of interest

the market rate of interest will sell for a discount and that a vanilla bond which has a coupon rate above the market rate of interest will see for a premium. What kind of bond or loan will sell at its par value regardless of what happens to the m..

  Compute the projects payback period

Draw a time line to show the cash flows of the project and compute the project's payback period, net present value (NPV), profitability index (PI), and internal rate of return (IRR).

  Question 1 we want to value a 2 year interest rate swap

question 1 we want to value a 2 year interest rate swap assuming the floating side is reset every three months while

  Describe how much company spend to buy new fixed assets

During the year, the firm sold assets with a total book value of $13,600 and also recorded $14,800 in depreciation expense. How much did the company spend to buy new fixed assets?

  Explain the wolf company is examining two capital-budgeting

The Wolf company is examining two capital-budgeting projects with 5-year lives. The first, project A, is a replacement project; the second, project B, is a project unrelated to current operations.

  Explain what is the firm''s wacc using market value weights

Hare Enterprises has 1.5 million shares of common stock outstanding and the only debt on their balance sheet consists of 50,000 of the 5% coupon bonds listed above

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd