PLEASE READ THE FOLLOWING: I only have enough credit for one more question. I am

Question

PLEASE READ THE FOLLOWING: I only have enough credit for one more question. I am aware that the rule states you only need to solve a limit of 5 answers. However, in this case there are people who are willing to help answer all of them. If you are one of them, please kindly help me answer all of these questions.

Please don't just answer the first question or the five questions, otherwise I'll hit the dislike button even if the answer is correct due to incompleted work. Thank you

1. The weighted average cost of capital Aa Aa Based on your understanding of the weighted average cost of capital, complete the following statements: In general, the the risk of a firm as perceived by its existing and potential investors, of capital (WACC). lower

Explanation / Answer

1)Greater
2)last
3)shareholder wealth
4)True
5)True
6)lesser than
7)Cost of equity= Risk free+(beta*market risk premium)
=3.86%+(0.78*6.63%)
=9.03%
8)cost=11.52%+3.55%=15.07%
9)THe formulae is
price =D1/(k-g)
k=(1.38/45.56)+5.72%
=8.75%
10)g= RoE*retention ratio
=22%*(1-65%)
=7.70%
11)Cost of equity=4.5%+(1.35*(5.9%-4.5%))
=6.39%

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.