1 Assume that the equity beta for JJ is 1 02 The Yield on 10 year treasuries is 4 , and that the market risk premium for the year is 9 What would be the cost of equity for JJ Express your answers in strictly numerical terms For example, if the answer is 5 , write 0 05 2 If the dividends for JJ firm...

1 According to CAPM cost of equity risk free betamarket ...

1. Assume that the equity beta for JJ is 1.02. The Yield on 10-year treasuries is 4%,...

Question:

1. Assume that the equity beta for JJ is 1.02. The Yield on 10-year treasuries is 4%, and that the market risk premium for the year is 9%. What would be the for JJ? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
2. If the dividends for JJ firm are the same for common and preferred stock, and the price for is $17. What would be the for JJ firm? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
3. Using the results of Problems 5 and 6. If you are to be conservative in your approach, What is the that you will use in estimating the WACC? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
4. The on CA s equity is 2.5%, and the firm has a yield to on its debt of 3%. Debt accounts for 15%, common equity for 80% and preferred equity for 5% of CA s total market value. If its tax rate is 40%, and the cost of preferred equity is 45%, What is this firm s WACC? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Cost Of Equity
The 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... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...