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• Required return not given*** (not sure why!)

  

• Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible project. In order to assess the viability of the project, Anna must first calculate the rate of return that equity holders expect from the company stock. The annual returns for J Corp. and for a market index are given below. Currently, the risk-free rate of return is 2.8% and the market risk-premium is 5.3% .

  a) What is the beta of J Corp.'s stock? Enter Answer (1 Mark)(Round your answer to two decimal places)

  b) Using the CAPM model, what is the expected rate of return on J Corp. stock for the coming year? Enter Answer (2 Marks)(Round your answer to one one-hundreth of a percent) Year J Corp. Return (%) Market Return (%) Enter your Final Answer Here

(11) Wh + x (11) Removi. x Broadcast a x C Get Homewc x C **** Requirer x t Assignmeni X X Assignment x G Question 3 x WhatsApp x + - x F = c + Office Editing for Docs, Sheets & Slides chrome-extension://bpmcpldpdmajfigpchkicefoigmkfalc/views/app.html Download Share Assignment 2 Workbook.xlsx File Edit Insert Format Help Qa Arial , 10 - BI USA $. EH5 E . H I J K L M N O P Q R A B C D E F G 1 Question 3 (3 Marks) 2 Refer to Question 2. Now that Anna has determined an appropriate rate 3 of return for J Corp.'s stock, she must calculate the firm's Weighted Average 4 Cost of Capital (WACC). There are currently 52.8 Million 5 J Corp. common shares outstanding. Each share is currently priced at 6 $17.68 . As well, the firm has 6,000 bonds outstanding and each 7 bond has a face value of $10,000, a yield to maturity o 3.49% and a 8 quoted price of $10,149.50 . J Corp.'s tax rate is 30%. J Corp. has no preferred shares outstanding. Enter Answer 11 What is J Corp.'s WACC? (Round your answer to one one-hundredth of a percent) Enter your Final Answer Here Complete your rough work in the space below Title Page Question 1 Question 2 Question 3 Question 4 Question 5 CA 4 04:59 (11) Wh + x (11) Removi. x Broadcast a x C Get Homewc x C **** Requirer x t Assignmeni X X Assignment x G Question 3 x WhatsApp x + - x F = c + Office Editing for Docs, Sheets & Slides chrome-extension://bpmcpldpdmajfigpchkicefoigmkfalc/views/app.html Download Share Assignment 2 Workbook.xlsx File Edit Insert Format Help Qa Arial , 10 - BI USA $. EH5 E . H I J K L M N O P Q R A B C D E F G 1 Question 3 (3 Marks) 2 Refer to Question 2. Now that Anna has determined an appropriate rate 3 of return for J Corp.'s stock, she must calculate the firm's Weighted Average 4 Cost of Capital (WACC). There are currently 52.8 Million 5 J Corp. common shares outstanding. Each share is currently priced at 6 $17.68 . As well, the firm has 6,000 bonds outstanding and each 7 bond has a face value of $10,000, a yield to maturity o 3.49% and a 8 quoted price of $10,149.50 . J Corp.'s tax rate is 30%. J Corp. has no preferred shares outstanding. Enter Answer 11 What is J Corp.'s WACC? (Round your answer to one one-hundredth of a percent) Enter your Final Answer Here Complete your rough work in the space below Title Page Question 1 Question 2 Question 3 Question 4 Question 5 CA 4 04:59