What is the companys cost of equity capital

Assignment Help Finance Basics
Reference no: EM131129571

The Tubby Ball Corporation’s common stock has a beta of 1.05. If the risk-free rate is 5.3 percent and the expected return on the market is 12 percent, what is the company’s cost of equity capital?

Reference no: EM131129571

Questions Cloud

Find the net dollar investment the portfolio expected return : Suppose the following conditions hold. The risk free rate is 4% and the market risk premium is 6%. We have a portfolio containing three stocks and a risk-free asset. We have $50 of the risk-free asset, $100 of A (B = 1.2), -$200 of B (B = 1.10) and $..
What must it do to achieve this objective : Using the Gordon Growth Model, the CAPM and assuming equilibrium in the equity market, express Beta as a function of the other variables. If a firm targets a B = 1.25, what must it do to achieve this objective? If it is not possible to do so, demonst..
Obtained from a frequency distribution by replacing : A percentage distribution is obtained from a frequency distribution by replacing each frequency by 100 times the ratio of that frequency to the total frequency. Construct a percentage distribution using the reactiontime data of Exercise 116.
What is the rate of depreciation : The salvage value S (in dollars) of a company limosine after t years is estimated to be given by the formula below. What is the rate of depreciation (in dollars per year) after 1 year
What is the companys cost of equity capital : The Tubby Ball Corporation’s common stock has a beta of 1.05. If the risk-free rate is 5.3 percent and the expected return on the market is 12 percent, what is the company’s cost of equity capital?
Find the largest possible volume of the box : If 1200 sq. cm. of material is available to make a box with a square base and an open top, find the largest possible volume of the box
What are the dimensions of such a rectangle : A rectangle is inscribed with its base on the x-axis and its upper corners on the parabola y= 9-x2 What are the dimensions of such a rectangle with the greatest possible area
Prepare the journal entry to record amortization expense : Prepare the journal entry to record amortization expense for 2010. Prepare the intangible assets section of Montana Matt's Golf Inc. at December 31, 2010. (No impairments are required to be recorded in 2010.)
What is the amount of dividends received during the year : The expected return on KarolCo. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of KarolCo is 2.3, then what is the risk premium on the market assuming CAPM is true? The stock was purchased for $16 and is now worth $21. What is..

Reviews

Write a Review

Finance Basics Questions & Answers

  What market price should we expect for ps

4. Planet & Son (PS) is expected to earn $7.87 per share next year. If the average P/E ratio of firms in PS's industry is 17.5 based on forecast earnings, what market price should we expect for PS? Show Work

  Calculate the arr payback npv and irr

Calculate the ARR Payback NPV and IRR

  Theories of interest rate determination

Define and compare the following theories: expectations theory, liquidity theory, market segmentation theory, and preferred habitat hypothesis theory.

  What should the approximate share price

what should the approximate share price be after each of the following? Also, assume that each of the events in a, b, and c are separate and independent of each other.

  Tadewinds corp has revenues of 9651220 costs of 6080412

tradewinds corp. has revenues of 9651220 costs of 6080412 interest payment of 511233 and a tax rate of 34 percent. it

  Generate a market evaluation for an asian

For a product category of your choice, search in news media and on-line data sources to generate a market evaluation for an Asian or Latin American country (your choice again), in the new global financial situation.

  Describe the venture

Describe the venture.

  Recommendations on potential discretionary financing needs

Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.

  What is the value of foggy stock to an investor

The earnings of Foggy Futures Weather Forecasting Company are expected to grow at an annual rate of 14% over the next 5 years and then slow to a constant rate of 10% per year. Foggy currently pays a dividend of $0.36 per share. What is the value of F..

  Present value-interest and time value of money

What single payment could be made at beginning of first year to achieve this objective? What amount could you pay at the end of each year annually for 10 years to achieve this same objective.

  Calculate the cost of equity using the dcf method calculate

berta industries stock has a beta of 1.20. the company just paid a dividend of 0.50 and the dividends are expected to

  Analyzing two mutually exclusive projects

A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below. Project S: -1,100 (Year 0), 1000 (Year 1), 350 (Year 2), 50 (Year 3). Project L: -1,100 (Year 0), 0 (Year 1), 300 (Year 2), 1,500 (Year 3).

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