1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
MakcuM [25]
2 years ago
7

ABC Corp. has a market capitalization of $300 million and a beta of 0.75. It has $75 million in outstanding debt and its debt be

ta is 0.20. The risk-free rate is 3% and the market risk-premium is 5%.
Required:
Calculate ABCâs unlevered cost of capital.
Business
1 answer:
Vesna [10]2 years ago
7 0

Answer:

6.20000%

Explanation:

The computation of the unlevered cost of capital is shown below;

Asset beta is

= (Debt × Debt beta + Equity × Equity beta) ÷ (Debt + Equity)

= (75 × 0.20 + 300 × 0.75) ÷ (75 + 300)

= 0.6400000

Now  

Unlevered cost of capital is

= risk free rate + asset beta × market risk premium

= 3% + 0.6400000 × 5%

= 6.20000%

You might be interested in
Examine the scenarios to determine the protected status, unprotected status, existence, or non-existence of a trade secret.
DedPeter [7]

Answer:

Protected status

Explanation:

In simple words, the trade secret is said to be protected when it has an economic value to the founding company or the company handling it and anyone who is exposed to the information regarding that is legally bound to not to disclose it.

Thus, from the above we can conclude that the given scenario indicates protected status.

6 0
3 years ago
According to proponents of the efficient-market hypothesis, the best strategy for a small investor with a portfolio worth $40,00
viktelen [127]

Answer:

E. Invest in mutual funds.

Explanation:

Individual investors tend to have relatively small portfolios and are usually unable to realize economies of size. The best strategy is to pool funds with other small investors and allow professional managers to invest the funds. Here, a fund manager is hired to invest the cash the investors have contributed, and the fund manager's goal depends on the type of fund; a fixed-income fund manager, for example, would strive to provide the highest yield at the lowest risk.

3 0
3 years ago
A. the ability to merely project one's abilities in the lack of actual accomplishments B. the ability to reduce the dependence o
MissTica

A leadership is best described as the ability to influence a group toward the achievement of a vision or set of goals.

<h3>What is a leadership?</h3>

In a formal setting, this refers to individual ability to influence, lead and guide others people to accomplish a predetermined mission in the manner desired.

Hence, it is best described as the ability to influence a group toward the achievement of a vision or set of goals.

Therefore, the Option D is correct.

Read more about leadership

<em>brainly.com/question/12522775</em>

#SPJ12

4 0
2 years ago
The Gardner Company expects sales for October of $247,000. Experience suggests that 40% of sales are for cash and 60% are on cre
LenKa [72]

Answer: $74100

Explanation:

Based on the information given, the amount of cash expected to be collected in October will be calculated thus:

October, credit sales will be:

= 60% x $247000

= $148200

Since the amount that'll be collected in October will be 50% of the credit sales. This will be:

= 50% × $148200

= $74100

6 0
3 years ago
5. John has two ATM transactions but only one of them has a fee (Interac). 1 point
Helga [31]

Answer:

You can withdraw by automatic electronic transfer, check, ATM card or debit card. There are many ways these days to withdraw money from your accounts. Let's go over each.

Explanation:

6 0
3 years ago
Other questions:
  • The residential division of Prism's high-speed Internet service uses one advertising agency, while its commercial division uses
    15·1 answer
  • Adam is a traveling salesperson for Peter Petri Plumbing Supply Corp. Adam has express authority to solicit orders from customer
    7·1 answer
  • Charisma, Inc., has debt outstanding with a face value of $6.2 million. The value of the firm if it were entirely financed by eq
    12·1 answer
  • Pharoah, Inc., paid a dividend of $4.25 last year. The company's management does not expect to increase its dividend in the fore
    10·1 answer
  • Great Lake Glassware Company issues $ 1 comma 197 comma 000 of its 12​%, 10minusyear bonds at 95 on February​ 28, 2018. The bond
    13·1 answer
  • Ranch Company estimates warranty expense as 5% of sales. On January 1, warranties payable was $13,000. During the year Ranch pai
    6·1 answer
  • Explain why the sampling method stated in (1) is the most efficient<br> method.
    13·1 answer
  • Your portfolio consists of an index mutual fund which represents the overall market and Treasury bills. The mutual fund has a po
    9·1 answer
  • Sorry i accidently did this. do not know how to work
    8·2 answers
  • Good Economy vs. Bad Economy:<br> During which economy will you find the best loan rates?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!