Hayek Corporation has a 0.5 probability of a return of 0.52, a 0.3 probability of a rate of return of 0.07, and the remaining probability of a 0.10 rate of return? What is the variance in the expected rate of return of Hayek Corporation.

 

Consider a company financed with 0.5 equity, 0.1 preferred stock, and the remaining debt subject to a corporate tax rate 0.4 If the required rate of return on the debt is 0.07, on the preferred stock is 0.09 and on the common stock is 0.15, What is the working average cost of capital for this company.

 

A stock is trading for 33, and just paid a dividend of 1.3 which is expected to grow at a fraction 0.15 per year. If Goldman Sacs charges a fraction 0.15 as a flotation cost? What is the required rate of return on a new stock issue.

Answer rating: 100% (QA)

Question 1 To find the variance in the expected rate of return we need to calculate the expected rate of return first We can do that by taking a weigh... View the full answer