Complete problem: Cost of Equity-CAPM Xez, Inc. has a beta of 0.8. The yield on a...

  

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Complete problem: Cost of Equity-CAPM Xez, Inc. has a beta of 0.8. The yield on a 3-month T-bill is 4%, and the yield on a 10-year T-bond is 6%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Show your work. 2. Complete problems: NPV, IRR, MIRR, Profitability Index, Payback, Discounted Payback A project has an initial cost of $60,000, expected net cash inflows of $10,000 per year for 8 years, and a cost of capital of 12%. Show your work. a. What is the project's NPV? (Hint: Begin by constructing a timeline). b. What is the project's IRR? c. What is the project's MIRR? d. What is the project's Pl? e. What is the project's payback period? f. What is the project's discounted payback period? Complete problem: Cost of Equity-CAPM Xez, Inc. has a beta of 0.8. The yield on a 3-month T-bill is 4%, and the yield on a 10-year T-bond is 6%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Show your work. 2. Complete problems: NPV, IRR, MIRR, Profitability Index, Payback, Discounted Payback A project has an initial cost of $60,000, expected net cash inflows of $10,000 per year for 8 years, and a cost of capital of 12%. Show your work. a. What is the project's NPV? (Hint: Begin by constructing a timeline). b. What is the project's IRR? c. What is the project's MIRR? d. What is the project's Pl? e. What is the project's payback period? f. What is the project's discounted payback period?

Answer rating: 100% (QA)

To calculate the estimated cost of common equity using the Capital Asset Pricing Model CAPM you need to use the following formula Cost of Equity RiskF... View the full answer