Question: i need help with 12, 13, and 14 please! 12. CAPM Estimate of the Cost of Equity Capital Voice River, Inc. has successfully moved through

i need help with 12, 13, and 14 please! i need help with 12, 13, and 14 please! 12. CAPM Estimate

12. CAPM Estimate of the Cost of Equity Capital Voice River, Inc. has successfully moved through its early life cycle stages and now is well into its rapid growth stage. However by traditional standards this provider of media-on-demand is still considered to be a relatively small venture. The interest rate on long-term U.S. government securities is currently 7 percent. Voice River's management has observed that over the long-run the average annual rate of return on small firm stocks has been 17.3 percent while the annual returns on long-term U.S. government securities has averaged 57 percent. Management views Voice River as being an average small company venture at its current life cycle stage. Determine the historical average annual market risk premium for small firm common stocks, B. Use the capital asset pricing model (CAPM) to estimate the cost of common equity capital for Voice River 13./Weighted Average cost of capital) Voice River, Inc. is interested in estimating its weighted average cost of capital (WACC) now that it is in its rapid growth stage. Voice River has a $500,000, 10 percent interest short-term bank loon, a $1.5 million, 12 percent long-term debt issue, and 42 million in common equity. The venture is in a 35 percent income tax bracket A. Determine the after-tax costs of the bank loan and the long-term debt issue. B. Calculate the WACC for Voice River, Inc., using the cost of common equity capital estimated in Problem 12. 14. (Weighted Average Cost of Capital Refer to Problem 13 above for Voice River, Inc A. Estimate the WACC if the cost of common equity capital is 20 percent B. Estimate the WACC if the cost of common equity capital is at the representative target rate of 25 percent for typical ventures in their lote rapid-growth life cycle state

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