What is the cost of equity (Ke) given RF = 2%, beta () = 1.5, expected market
Question:
What is the cost of equity (Ke) given RF = 2%, beta (β) = 1.5, expected market return
(ERM) =12%?
Cost Of EquityThe cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...
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BALANCE SHEET Cash Marketable securities Accounts receivable Inventory $140,000 Accounts payable 200,000 Wages payable 40,000 Short-term debt 1,000,000 Long-term debt Total liabilities 900,000 Common stock 200,000 100,000 250,000 690,000 $1,240,000 950,000 90,000 $2,280,000 Fixed assets Retained earnings Total assets $2,280,000 Total equity and liabilities INCOME STATEMENT Sales CGS Amortization Interest EBT Taxes NI Shares outstanding $2,000,000 $400,000 $90,000 $56,400 $1,453,600 $435,000 $1,018,600 500,000
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Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
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