User Account

All Pages

Required rate of return on equity

Assignment Help Finance Basics
Reference no: EM131041425

Holland Auto Parts is considering a merger with Workman Car Parts. Workman's market-determined beta is 0.9, and the firm currently is financed with 20% debt, at an interest rate of 8%, and its tax rate is 25%. If Holland acquires Workman, it will increase the debt to 60%, at an interest rate of 9%, and the tax rate will increase to 35%. The risk-free rate is 6% and the market risk premium is 4%. What will Workman's required rate of return on equity be after it is acquired?

Reference no: EM131041425

Questions Cloud

Job with the federal government in department of health : Discussion: Department of Health: Assume you have a job with the federal government in the Department of Health. You work in a room and do not engage with the public, but you specifically deal with childbirth issues. You are also heavily involved in ..
Futures or forward contracts : What advantage do currency options offer that are not available with futures or forward contracts? (Length 200 words)
National health information infrastructure : Research the current status of the National Health Information Infrastructure (NHII). Write a one-page paper discussing the current status, any new developments, barriers to implementation, etc. APA style must be used. Below are helpful resources/lin..
Try persevering long term relationships with customer : Knowing who the right people are and asking them the right questions.?Rather than controlling the customer, Listen to them and care for them.? Agree to work things out and always try persevering long term relationships with customer
Required rate of return on equity : If Holland acquires Workman, it will increase the debt to 60%, at an interest rate of 9%, and the tax rate will increase to 35%. The risk-free rate is 6% and the market risk premium is 4%. What will Workman's required rate of return on equity be a..
Define e-mail and explain the security concerns : Define e-mail and explain the security concerns that should be considered in the use of e-mail. What are some mitigation techniques? Have you ever received a phishing or other suspicious e-mail? What tipped you off that it may not have been legitimat..
Percent growth rate in dividends : Lohn Corporation is expected to pay the following dividends over the next four years: $16, $12, $11, and $6.50. Afterward, the company pledges to maintain a constant 6 percent growth rate in dividends forever. If the required return on the stock i..
Case study assignment originality check enabled : Please read the cases in Chapter 7 - Cultural Intelligence in Action. Answer the following questions in a short answer format, and highlight your answers in yellow. Each question must be answered in at least 3 sentences or more (excluding quotes/r..
Pizza-ready would be a profitable investment : Entrepreneur John Doe has just founded Pizza-Ready Inc., which will accept pizza orders for pick up over the phone. Pizza-Ready's strategy is to compete with established pizza restaurants by offering superior, fresh, made-to-order deep-dish pizza and..

Reviews

Write a Review

Finance Basics Questions & Answers

  Statements of cash flows

Pick three companies from different industries and situate their statements of cash flows for the most recent year.

  What changes in the management of genatron current assets

What changes in the management of Genatron's current assets seem to have occurred between the two years?

  Nail world inc contracted to ship 1000 boxes of nails to

nail world inc. contracted to ship 1000 boxes of nails to paulette at 1.32 per box. later nail world inc. telephoned

  What is the company fixed operating costs

A company reports that if it's sales are $80,000, EBIT = $8,000, net income = $2,400, DOL = 2.5, and DFL = 2.0(a) What is the company's fixed operating costs? (b) What will the company's net income be if sales turn out to be $88,000 rather than $8..

  What is the actual return for the three months

If you purchase a three month $10,000 T-Bill for $9,800, what is the actual return for the three months. Can you please help me by showing me the calculations?

  What is the internal rate of return on this project

Quick Sale Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000, $11,750,000, and $6,350,000 over the next three years.

  Schnusenberg corporation just paid a dividend of 065 per

schnusenberg corporation just paid a dividend of 0.65 per share and that dividend is expected to grow at a constant

  The director of your department has asked you to provide on

you have already generated a project charter and a project schedule for the topliance corporation which sells home

  Return on investment-education funding

Develop a three- to four-page analysis (excluding the title and reference pages) on the projected return on investment for your college education and projected future employment. This analysis will consist of two parts:

  The default-free yield curve on zero-coupon us government

the default-free yield curve on zero-coupon u.s. government treasury securities is given below.maturity in years rate1

  A mathematical calculation is needed

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homew..

  Annuity-perpetuity

(Annuity - perpetuity) 3 years from now (at t=3) you will begin to receive cash flows of $1000 per year. These cash flows will continue forever. If the discount rate is 5%, what is the present value (now, at t=0) of these cash flows?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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