You need to calculate the cost of equity capital for a firm that is traded on the New York Stock Exchange. Which of the following would likely be least helpful to you?
Answer: Knowledge of the stock's price six months ago.
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FIN3403
- If the risk-free rate is 4 percent, an all-equity firm's beat is 2, and the market risk premium is 6 percent, what is the firm's cost of capital?
- Suppose the risk-free rate is 5%, the market rate of return is 10%, and beta is 2%. Find the required rate of return using CAPM.
- MNO preferred stocks pays dividend of $2 per year and gas a price of $20. If MNO's tax rate is 40%, the Aftertax rate of return om its preferred stock is:
- According to the CAPM, what is the expected return on a stock if its beat is equal to zero?
- Other companies that specialize only in projects similar to the project your firm is considering are called ______.
- If an analyst's forecast for a firm's earnings growth is 7 percent, and its dividend yield is 3 percent, its cost of equity will be ______.
- Which of the following is Tax-deductible to the firm?
- Suppose the risk-free rate is 5.5%, the market rate of return is 8.5%, and beta is 1.25%. Find the required rate of return using CAPM.
- The cost of capital primarily on the _______ of funds, NOT the ______.
- A company has a borrowing rate of 15 percent and a tax rate of of 30 percent. What is its aftertax cost of debt?
- Some risk adjustment to a firm's WACC for projects of differing risk, even if it is subjective, is probably?
- To estimate the dividend yield of a particular stock, we need?
- Finding a firm's overall cost of equity is difficult because:
- The rate to discount project cash flows is known as the ____?
- The following are DIS-ADVANTAGES of the SML approach?
- The following are ADVANTAGES of the SML approach?
- If a firm uses its overall cost of capital to discount cash flows from projects in HIGHER RISK divisions, it will accept_______ projects.
- The WACC is the minimum required return for ______.
- If a firm issues no debt, its average cost of capital will equal _____?
- The return an investor in a security received is _______, _______ the cost of the security to the company that issued it.
- Preferred stock ________?
- The growth rate of dividends can be found using:
- What is the required return on stock (Re), according to the constant dividend growth model, if the growth rate (g) is zero?
- If an ALL_EQUITY firm discounts a project's cash flows with the form's overall weighted average cost capital even though the project's beta is less than the form's overall beat, it is possible that the project might be:
- Suppose a firm's capital structure consists of 30% debt, 10% preferred stock and 60% equity. the form's bond yield 10% on average before taxes, the cost preferred stock is 8% and the cost of equity is 16%. Calculate the form's WACC assuming a tax rate of 40%.
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.