suppose that the risk-free rate is 6% and that the expected market yield is 13%.What will be
Question:
suppose that the risk-free rate is 6% and that the expected market yield is 13%.What will be the required rate of an action whose beta is 0.7?
- Risk-free rate (RF) 6%
- Expected Market Performance (ERM) 13%
- BETA 0.7
Exercise 2:calculate the WACC - Weighted Average Cost, for its acronym in English, of the company Soya according to the following information:
- Capital structure: 60% liabilities, 40% of Capital
- Cost of liabilities: 7.5%
- Tax rate: 35%
- Risk-free rate: 2.6%
- The beta of the company: 0.85
- Market rates: 8.0%
Exercise 3:calculate the WACC - Average Weighted Cost, for its acronym in English, Croydon company according to the following information:
- Capital structure: 55% liabilities, 45% of Capital
- Cost of liabilities: 12.5%
- Tax rate: 40%
- Risk-free rate: 4.5%
- The beta of the company: 0.65
- Market rates: 9.0%
What ismeant by the capital structure of a company?
How is the cost of the capital structure calculated?
How is the cost of capital or cost of equity of a company calculated?
What is the CAPM model and how is it related to the cost of corporate equity?
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim