Answer:
Equity Beta= 2,529
Explanation:
The risk of investing in a particular stock is measured with a metric referred to as equity beta. Equity Beta measures the volatility of the stock to the market, how sensitive is the stock price to a change in the overall market. It compares the volatility associated with the change in prices of a security. It changes with the capital structure of the company which includes the debt portion.
There are 3 methods to calculate Equity Beta:
1- Using the CAPM Model
2- Using Slope Tool
3- Using Unlevered Beta
In this exercise, we have the information to use the third method.
Equity Beta Formula = Unlevered Beta [ 1 + (D/E)( 1-Tax )]
Unlevered Beta= 1,23
D/E= 0,46
Tax rate= 0,35
Equity Beta = 1,23 + (1+0,46*0,65)
Equity Beta= 2,529
Answer:
The statement is False
Explanation:
The given statement is false because the if a person or an individual wants to maintain a high self esteem and a good attitude, one needs to evaluate or determine the follow up from the after interviews that have negative experiences, not with that interviews that have positive experiences.
As if the person evaluates only positive experience, then the person will become overconfidence which is not good . So, it is important to see both positive experience as well as negative experience.
Answer:
$9.00
Explanation:
Note: See the attached file for the calculation of PV of year 1 to 7 dividends.
Price at year 7 = year 8 dividend / (Rate of return - Perpetual growth rate) = (0.5747245056 * 1.05) / (10% - 5%) = $12.0692146176
PV of price at year 7 = $12.0692146176 / (1.10)^7 = $6.19341546169015
Current price = Sum of PV of years 1 to 7 dividends + PV of price at year 7 = $2.81096656749202 + $6.19341546169015 = $9.00
