Question
A company's shares have a volatility ratio () equal to 1.1. In market value, its own resources (shares) represent 45% of its total sources of
A company's shares have a volatility ratio (β) equal to 1.1. In market value, its own resources (shares) represent 45% of its total sources of financing. It is known that in the market, the return that can be obtained without risk is 5% and that the expected return of the market portfolio is 8.5%. Finally note that the EMBI+ is 845 points and the tax on profit is 25%. Find
1) Shareholder Opportunity Cost
2) WACC or Weighted Average Cost of Capital if the cost of debt is 6%
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