Cash Hoarders Inc is an all equity firm. A firm has averaged about $2 billion in cash.
Fantastic news! We've Found the answer you've been seeking!
Question:
Cash Hoarders Inc is an all equity firm. A firm has averaged about $2 billion in cash. The market value of equity has averaged about $8 billion The firm has an equity beta of 1. The risk-free rate = 3.2% and the market risk premium is 5%
What is the required return on Cash Hoarders OPERATING BUSINESS based on the CAPM model? Note: The firm's equity value ($8 billion) derives from value of operations and value of cash holdings.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
Posted Date: