Answer:
the formula used to calculate the cost of equity (required rate of return) based on the bond yield plus risk premium is fairly simple:
cost of equity (Re) = yield of debt (bonds) + firm's risk premium = 11.52% + 3.55% = 15.07%
I'm not sure if the question was copied correctly or not, so I looked for similar questions and it included different numbers.
<em>The Harrison Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Harrison's bonds yield 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Harrison's cost of Internal equity is: = 10.28% + 4.95% = 15.23%</em>
<em>Another question: </em>
<em>The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Kennedy's bonds yield 11.52%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Kennedy's cost of internal equity is: = 11.52% + 4.95% = 16.47%</em>
Maybe by planet earth having a lot of density.<span />
Answer:
In order for Suzanne to be considered an active participant in her stores, she must work at least 31 hours more. That way, her total working hours will be above 500, and she can deduct any losses from her adjusted gross income.
If she doesn't work at least 31 hours more, these activities will be considered passive activities and can only offset passive income.
Explanation: