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
A next monthly interest payment on a loan with a principal balance of $19,531 is $109.86. what is the interest rate on the loan?
8_murik_8 [283]

The next monthly interest payment on a loan with a principal balance of $19,531 is $109.86. 6.75% is the interest rate on the loan.

The interest rate is the percentage of the loan that the borrower pays to the lender. Most loans pay interest in addition to the principal. Lending rates are usually expressed in his APR or APR which includes both interest and fees.

Monthly Interest Payment means the amount of interest payable on the Payment Date for the preceding Interest Period based on the interest calculated at the Monthly Interest Rate for the preceding Interest Period.

Interest is an additional payment known as interest on top of the principal paid to a lender for the right to borrow money.

Learn more about monthly interest payment at

brainly.com/question/2151013

#SPJ4

7 0
2 years ago
Jillian has just started her first job with a $45,000 salary at a company with a 401(k) plan that has a 100% match up to 3% gros
gogolik [260]

Answer:

Jillian

What Jillian should ideally do is:

a. Contribute 1650 in a Roth IRA, and 1350 In her company’s 401(k) plan.

Explanation:

a) Data and Calculations:

Salary = $45,000

401(k) = 3% of $45,000 = $1,350

Employer's match to the 401(k) = $1,350 (100%)

Savings affordable = $3,000

b) Jillian can contribute to Roth IRA and her company 401(k) which her company will also match 100%.  Her contributions to both funds are within the allowed limits.  In 2020, the allowed limit of 401(k) plan is $19,500 while that of Roth IRA is $6,000.

4 0
3 years ago
15) You are
Bingel [31]

Answer:

Only going to dept for things you really need and have planned for

6 0
2 years ago
Which services are bannks most liikly to offer
gregori [183]

Answer:

checking accounts, saving accounts, certificates of deposit, and loans.

Explanation:

4 0
3 years ago
Explain why the monopsonist's marginal-revenue-product curve is downward sloping. Include the role of the price for the final go
alekssr [168]

Answer:

A monopsony is market where there is only one buyer, e.g. the government is the sole buyer for nuclear submarines in the US.

The demand curve of a monopsony is similar to the demand curve of any other type of market, i.e. it is downward sloping. Since there is only 1 buyer, the demand curve is also the supply curve. If the monopsonist wants to increase the quantity demanded at a lower price, the supplier (or suppliers) must be able to lower its costs and that generally results in lower labor costs.

3 0
2 years ago
Other questions:
  • É uma estratégia competitiva que busca alcançar retornos máximos dos produtos que estão na fase de declínio do seu ciclo de vida
    7·1 answer
  • The following information is available for Windsor, Inc. for the year ended December 31, 2017. Beginning cash balance $ 45,720 A
    7·1 answer
  • A company undergoing _____ completely redesigns its work processes, hoping for dramatic improvements in the efficiency and effec
    10·1 answer
  • The following information pertains to Maynard Corporation’s income statement for the 12 months just ended. The company has an ef
    5·1 answer
  • Consider the relationship between the AE curve and the AD curve. A rise in the amount of desired​ consumption, investment, gover
    5·1 answer
  • Plano Co. 12/31/2021
    15·1 answer
  • The history and development of economics as subject??​
    6·1 answer
  • What’s the answer???
    9·1 answer
  • Discuss reasons why a business needs funding ?
    13·1 answer
  • What happens if you fail to pay your annual taxes?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!