Beta of a company with an expected return

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What is the beta of a company with an expected return of 12% if Treasury bills yield 6% and the market risk premium is 8%?

If a project is expected to increase inventory by $17,000, increase accounts payable by $10,000, and decrease accounts receivable by $1,000, what effect does working capital have during the life of the project

How does net working capital affect the NPV of a 5-year project if working capital is expected to increase by $25,000 at end of 5 years and the firm has a 15% cost of capital?

Please consider the following information for the next 4 questions (Q17 - Q20). University Inc. is for sale and there is a price tag of $225,000. Your company, ABC, who is considering the purchase, has a beta of 1.5, the market is expected to have a 20% return and the risk-free rate is 5%. The forecasted free cash flows for the next 4 years for University are 7000 (FCF1), 22000(FCF2), 0(FCF3), and 50000 (FCF4). The company is expected to grow at 4% indefinitely after that. Your company has a debt/equity ratio of 2/3 and the applicable tax rate is 35%. ABC's cost of debt (before taxes) is 8%. What is the cost of equity for ABC company?

Reference no: EM131770828

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