Variance in the expected rate of return of hayek corporation

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Hayek Corporation has a 0.0 probability of a return of -0.10, a 0.3 probability of a rate of return of 0.06, and the remaining probability of a 0.50 rate of return. What is the variance in the expected rate of return of Hayek Corporation?

Menger Corporation has a 0.0 probability of a return of 0.68, a 0.1 probability of a rate of return of 0.06, and the remaining probability of a -0.10 rate of return. What is the expected rate of return of Menger Corporation?

Consider a company financed with 0.9 equity, 0.0 preferred stock, and the remaining debt subject to a corporate tax rate 0.3 If the required rate of return on the debt is 0.02, on the preferred stock is 0.09 and on the common stock is 0.16, what is the working average cost of capital for this company?

Reference no: EM131893815

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