What is pepsicos equity cost of capital

Assignment Help Financial Management
Reference no: EM131456203

Suppose Pepsico's stock has a beta of 0.62. If the risk-free rate is 4% and the expected return of the market portfolio is 8 %, what is Pepsico's equity cost of capital?

Pepsico's equity cost of capital is _____%. ?(Round to two decimal places.)

Reference no: EM131456203

Questions Cloud

What is the expected rate of return on stock with a beta : What is the expected rate of return on a stock with a beta of 1.28?
The estimated projects beta : Debt outstanding $409 million Number of shares of common stock 76 million Stock price per share $17.87
Discuss two reasons for tax motivated sale of company : briefly discuss two reasons for a tax motivated sale of the company through a merger.
What was the investors actual real after-tax rate of return : An individual actually earned a 4 percent nominal return last year. what was the investor's actual real after-tax rate of return?
What is pepsicos equity cost of capital : Suppose Pepsico's stock has a beta of 0.62. If the risk-free rate is 4% and expected return of market portfolio is 8 %, what is Pepsico's equity cost of capital
General partner-all business organizations have by laws : A general partner. Income from both sole proprietorships and partnerships is taxed as individual income. All business organizations have by laws.
What is the price of the bond if it matures in five years : AAA Company is about to issue a bond with semiannual coupon ?payments, What is the price of the bond if it matures in 5 years?
Requires making three annual payments : It requires making three annual payments of $1000 each at the end of the next four years.
The weighted average cost of capital is : You would like to estimate the weighted average cost of capital for a new airline business. The equity cost of capital is, The weighted average cost of capital

Reviews

Write a Review

Financial Management Questions & Answers

  Equivalent annual savings-straight-line depreciation

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. What is the equivalent annual savings from the purchase..

  Withdrawn from the margin account

A company enters into a short futures contract to sell 4,000 bushels of wheat for 150 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what circumstances could $..

  What will be the break-even level of ebit

GTB, Inc., has a 25 percent tax rate and has $85,716,000 in assets, currently financed entirely with equity. Equity is worth $6 per share, and book value of equity is equal to market value of equity. What will be the break-even level of EBIT?

  Dividend exclusion for corporations receiving dividends

The dividend exclusion for corporations receiving dividends from another corporation has resulted in

  Value of savings account

At the end of 2011, the value of my savings account was $20,000. Over the next three years, the rates of return on the account were as shown below. How much was in the account at the end of the third year, 2014?

  Determine the aftertax cost of debt

Russell Container Corporation has a $1,000 par value bond outstanding with 30 years to maturity. The bond carries an annual interest payment of $120 and is currently selling for $820 per bond. Compute the yield to maturity on the old issue and use th..

  What will happen to the banks net interest income

If a bank has 10 billion dollars of 1-year loans and 40 billion dollars of 5-year loans, which are financed by 30 billion dollars of 1-year deposits and 20 billion dollars in 5-year deposits. If interest rates increase by 1 percent every year for the..

  Two mutually exclusive projects-cash flow

Romboski, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 57,000 −$ 57,000 1 33,000 20,300 2 27,000 24,300 3 19,500 29,000 4 13,400 25,300 Requirement 1: (a) What is the IRR for each of these p..

  Compute the expected return on the portfolio

A porfolio consists of 75% invested in Security A with an expected return of 35% and 25% invested in Security B with an expected return of 7%. Compute the expected return on the portfolio.

  Bond makes annual coupon payments

Company just issued a 10 year 7% coupon bond. The face value of the bond is $1,000 and the bond makes annual coupon payments. If the required return on the bond is 10%, what is the bond’s price?

  What is the value of the straight-debt portion of bonds

Herbert Engineering is issuing new 15-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry a 9% annual interest rate. However, with the warrants attached the bonds will pay a 6% annual coupon. There are 30 w..

  The futures contracts are required to hedge this position

A company has a $26 million portfolio with a beta of 1.2. The futures price for a contract on an index is 1900. The size of one futures index contract is $250 times the index. What position (long or short) in futures contracts should the company take..

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