Your company has always assumed a cost of common equity capital of about 12.0%. An intern...
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Your company has always assumed a cost of common equity capital of about 12.0%. An intern you supervise at the firm recently gathered the information below, and you now want to run a check on that long-standing assumption. What is your good estimate of Re? the yield right now on a 5-year US Treasury note: 2.57% total liabilities: $14 million total shareholders' equity: $25 million company's stock beta: 1.19 5-year average return on the S&P 500: 10.78% YTM on the company's only bond issue: 4.20% Enter your response as a regular percentage rate, rounded to the nearest first decimal. Do not enter dollar signs, percent signs, or commas. Your company has always assumed a cost of common equity capital of about 12.0%. An intern you supervise at the firm recently gathered the information below, and you now want to run a check on that long-standing assumption. What is your good estimate of Re? the yield right now on a 5-year US Treasury note: 2.57% total liabilities: $14 million total shareholders' equity: $25 million company's stock beta: 1.19 5-year average return on the S&P 500: 10.78% YTM on the company's only bond issue: 4.20% Enter your response as a regular percentage rate, rounded to the nearest first decimal. Do not enter dollar signs, percent signs, or commas.
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Related Book For
Introduction to Finance Markets Investments and Financial Management
ISBN: 978-1118492673
15th edition
Authors: Melicher Ronald, Norton Edgar
Posted Date:
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