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e-lub [12.9K]
3 years ago
8

If the firm’s beta is 1.6, the risk-free rate is 9%, and the average return on the market is 13%, what will be the firm’s cost o

f common equity using the CAPM approach? c. If the firm’s bonds earn a return of 12%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations.
Business
1 answer:
Luden [163]3 years ago
3 0

Answer:

CAPM= RF+B(RM-RF)

= 9+1.6(13-9)

=15.4%

13=RS+1.6*(4)

13=RS+6.4

RS=13-6.4

RS=6.6%

Explanation:

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Option B

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3 0
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Financial statement data at December 31 for Ecco Company are shown below. Cost of merchandise sold $552,500 Inventories: Beginni
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Answer:

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Explanation:

Giving the following information:

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3 years ago
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Dima020 [189]

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6 0
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Assume that the reserve ratio is 20% and banks in the system are loaning out all their excess reserve. If people collectively ca
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2 years ago
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