What is the cost of common stock

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Reference no: EM13688242

QUESTION 12
1. The risk-free rate is 5.5%, the market risk premium is 9.5%, and the stock's beta is 1.21. What is the cost of common stock?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
QUESTION 13
1. The spot rate for the pound is £0.6025 = $1 and the spot rate for the Canadian dollar is C$1.201 = $1. What is the £/C$ cross rate?
Enter your answer rounded off to FOUR decimal points. Do not enter any currency sign in the answer box.

1 points
QUESTION 14
1. Suppose that today's stock price is $36.5. If the required rate on equity is 18.7% and the growth rate is 5.2%, compute the expected dividend (i.e. compute D1)
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
QUESTION 15
1 points
QUESTION 16
1. ABC Company offers a perpetuity which pays annual payments of $8,530. This contract sells for $263,998 today. What is the interest rate?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
QUESTION 17
1. The present value of a 19-year annuity is $80,396. If the interest rate is 14% and payments are made at the end of each period, what is the amount of each payment?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
QUESTION 18
1. What is the net present value of the following cash flows? Assume an interest rate of 6%
Year CF
0 -$12,885
1 $5,876
2 $6,372
3 $7,452
2. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answers box.
3.
1 points
1 points
QUESTION 20
1. Consider a taxable bond with a yield of 10.4% and a tax-exempt municipal bond with a yield of 5.5%. At what tax rate would you be indifferent between the two bonds?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

Reference no: EM13688242

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