Define the market capitalization rate for a stock. Does it equal the opportunity cost of capital of
Question:
Define the market capitalization rate for a stock. Does it equal the opportunity cost of capital of investing in the stock?
Cost Of CapitalCost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 58% (12 reviews)
The market capitalization rate for a stock is the rate of ...View the full answer
Answered By
Joseph Mwaura
I have been teaching college students in various subjects for 9 years now. Besides, I have been tutoring online with several tutoring companies from 2010 to date. The 9 years of experience as a tutor has enabled me to develop multiple tutoring skills and see thousands of students excel in their education and in life after school which gives me much pleasure. I have assisted students in essay writing and in doing academic research and this has helped me be well versed with the various writing styles such as APA, MLA, Chicago/ Turabian, Harvard. I am always ready to handle work at any hour and in any way as students specify. In my tutoring journey, excellence has always been my guiding standard.
4.00+
1+ Reviews
10+ Question Solved
Related Book For
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
Question Posted:
Students also viewed these Corporate Finance questions
-
The market capitalization rate for Admiral Motors Company is 8%. Its expected ROE is 10% and its expected EPS is $5. If the firm's plowback ratio is 60%, what will be its P/E ratio?
-
A firm with an opportunity cost of capital of 15 percent faces two mutually exclusive investment projects: (1) Acquire goods at the start of the year, ship them to Japan, and sell them at the end of...
-
What is the discount rate for a stock whose beta is 1.5. Currently, the expected market return is 10%, and the risk-free rate is 3%.
-
A woman flies from Phoenix to Denver (a distance of 800 mi) at a rate 40 mph faster than on the return trip. If the total time of the trip is 9 hrs, what was her rate going to Denver, and what was...
-
When thorium (atomic number 90) decays by emitting an alpha particle, what is the atomic number of the resulting nucleus?
-
The general ledger of jackrabbit Rentals at January 1, 2018, includes the following account balances: The following is a summary of the transactions for the year: a. January 12Provide services to...
-
Define the major dimensions of social stratification, and explain how they relate to other aspects of culture and society.
-
Storage Systems, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the companys products is a heavy-duty corrosion-resistant metal...
-
A loan officer is creating a loan portfolio by combing three other loan funds ( high risk, medium risk, and low risk ) . The officer is considering five interest rate environments ( A , B , C , D ,...
-
Schmidt Company began operations on January 1, 2006 and used the LIFO inventory method for both financial reporting and income taxes. However, at the beginning of 2008 the company decided to switch...
-
The present value of investing in a stock should not depend on how long the investor plans to hold it. Explain why.
-
Rework Table 4.1 under the assumption that the dividend on Fledgling Electronics is $10 next year and that it is expected to grow by 5 percent a year. The capitalization rate is 15percent. Expected...
-
If your de Broglie wavelength were 0.50 m, how fast would you be moving if your mass is 68.0 kg? Would you notice diffraction effects as you walk through a doorway? Approximately how long would it...
-
What is the difference between a scratch list and an outline?
-
Health concerns are not the only problem, soft-drink makers are also facing a boom in alternative beverages. Your Task. Identify the sentence fault (fragment, run-on sentence, comma splice). Then...
-
While interviewing applicants, questions are often asked by recruiters about qualifications. Your Task. Revise the above sentence to avoid dangling and misplaced modifiers.
-
How long should paragraphs be?
-
Tracking devices are being installed by many companies to gather real-time information on how employees interact. Your Task. Business writing is more forceful when it uses active-voice verbs. Revise...
-
In late 2012 or early 2013, the plaintiff, Lan England, agreed to sell 258,363 shares of stock to the defendant, Eugene Horbach, for \($2.75\) per share, for a total price of \($710,498.25.\)...
-
Consider the activities undertaken by a medical clinic in your area. Required 1. Do you consider a job order cost accounting system appropriate for the clinic? 2. Identify as many factors as possible...
-
Consider the reaction Co(s) + Ni 2+ (aq) Co 2+ (aq) + Ni(s), with E cell = 0.02 V. If Co(s) is added to a solution with [Ni 2+ ] = 1 M, should the reaction go to completion? Explain.
-
Look again at Problem 30. Suppose another month has passed, so the bill has only one month left to run. It is now selling at a discount of 3%. What is the yield? What was your realized return over...
-
In 2006 agency corporate bonds sold at a yield of 5.32%, while high-grade tax-exempts of comparable maturity offered 3.7% annually. If an investor receives the same after-tax return from corporates...
-
Suppose you are a wealthy individual paying 35% tax on income. What is the expected after-tax yield on each of the following investments? a. A municipal note yielding 7.0% pretax. b. A Treasury bill...
-
Discuss the cultural differences between China and the United States. What would be the biggest adjustments I might need to make if working there as an expatriate? What are the most...
-
In her Ted talk, Kristi Rogers talks about the future of advertising and why it's crucial for ads to be relevant. She points out that even though we have lots of data and technology for digital ads,...
-
Consider ways in which an employer can make an employee feel like part of the team and/or empower them to act. More specifically, please respond to the following questions: How can an employer work...
Study smarter with the SolutionInn App