Zoom stock has a beta of 1.46. The risk-free rate of return is 3.07 percent and the market rate of return is 11.81 percent. What is the amount of the risk premium on Zoom stock
The risk premium for an individual security is computed by:
The risk-free rate of return is 3.68 percent and the market risk premium is 7.84 percent. What is the expected rate of return on a stock with a beta of 1.32?
Central Systems, Inc. desires a weighted average cost of capital of 7 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 10 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
Miller Manufacturing has a target debt – equity ratio of. 60. Its cost of equity is 15 percent, and its cost of debt is 4 percent. If the tax rate is 35 percent, what is the company’ s WACC?
Filer Manufacturing has 9 million shares of common stock outstanding. The current share price is $ 75, and the book value per share is $ 6. The company also has two bond issues outstanding. The first bond issue has a face value $ 85 million, a coupon of 10 percent, and sells for 96 percent of par. The second issue has a face value of $ 65 million, a coupon of 11 percent, and sells for 109 percent of par. The first issue matures in 25 years, the second in 9 years.
Titan Mining Corporation has 10.1 million shares of common stock outstanding and 450,000 5 percent semiannual bonds outstanding, par value $ 1,000 each. The common stock currently sells for $ 49 per share and has a beta of 1.55, and the bonds have 15 years to maturity and sell for 116 percent of par. The market risk premium is 8.9 percent, Tbills are yielding 4 percent, and the company’ s tax rate is 38 percent.