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P15.1 Levered Beta If IBM had an upper-marginal tax rate of 40%, financed itself with 30% debt (relative to 70% equity), and had an unlevered beta of 1.25. Also suppose that the prevailing risk-free rate is 4% and the return of the market average is 10%. a.) What is IBM's levered beta? b.) What is IBM's unlevered cost of equity? c.) What is IBM's levered cost of equity? d.) How much additional risk premium are investors requiring due to IBM's additional, debt-based risk? e.) Suppose that you were told the realized (levered) beta (from the marketplace) was 1.40, can you find IBM's (hypothetical) unlevered beta and, if so, what is it? f.) How would increases in the following variables impact IBM's equity costs? i.] Unlevered beta ii.] Upper Marginal Tax Rate iii.] Weight of Debt iv.] Wight of Equity
expected cash dividends are 3.00 the divedend yield is 4 flotation costs are 4 of price and the growth rate is 3.
Evaluation of bonds yield to maturity and Kaufman Enterprises has bonds outstanding with a $1000 face value and 10 years left until maturity
forecasted information for the year 2014 sales300000000 operating profitability 6 capital requirements 43 growth 5
Mr. Smith is in the 30 percent tax bracket. He earns $50,000 per year. Determine the rate for Good Neighborcare bond that would give Mr. Smith the same after tax return as Megacorp bond?
what is the relationship between financial and strategic planning? what are some of the key financial policies for
Make an expanded analysis on financial statements of Toyota Motors. Please employ the most current financial statements available on www.sec.gov.
Suppose your company requires $350,000 next year to finance several projects for the long-term growth of the company and increasing shareholder value.
the bank cited in the foregoing illustrations wants to charge floating rates for its borrower since it expects
Economic
your employer contributes 50 a week to your retirement plan. assume that you work for your employer for another 20
smith company presents the following data for 2006. inventories beginning of year 310150 inventories end of year 340469
1 which of the following statements is correct?a. call options generally sell at a price greater than their exercise
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