Homework Helper

Not Rated (0)

$17/per page/

About Homework Helper

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Accounting,Applied Sciences See all
Accounting,Applied Sciences,Art & Design,Chemistry,Economics,Essay writing Hide all
Teaching Since: Apr 2017
Last Sign in: 418 Weeks Ago, 5 Days Ago
Questions Answered: 3232
Tutorials Posted: 3232

Education

  • MBA,MCS,M.phil
    Devry University
    Jan-2008 - Jan-2011

  • MBA,MCS,M.Phil
    Devry University
    Feb-2000 - Jan-2004

Experience

  • Regional Manager
    Abercrombie & Fitch.
    Mar-2005 - Nov-2010

  • Regional Manager
    Abercrombie & Fitch.
    Jan-2005 - Jan-2008

Category > Business & Finance Posted 19 May 2017 My Price 12.00

The total market value of Okefenokee

The total market value of Okefenokee Real Estate Company's equity is $6 million, and the total value of its debt is $4 million. The treasurer estimates that the beta of the stock currently is 1.0 and that the expected risk premium on the market is 12%. The Treasury bill rate is 4%.
a.

What is the required rate of return on Okefenokee stock?
b.

What is the beta of the companyAc€?cs existing portfolio of assets? The debt is perceived to be virtually risk-free. (Round your answer to 2 decimal places.)
    
c.

Estimate the weighted-average cost of capital assuming a tax rate of 30%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
    
d.

Estimate the discount rate for an expansion of the companyAc€?cs present business. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
   
e.

Suppose the company wants to diversify into the manufacture of rose-colored glasses. The beta of optical manufacturers with no debt outstanding is 1.5. What is the required rate of return on OkefenokeeAc€?cs new venture? (You should assume that the risky project will not enable the firm to issue any additional debt.)

Answers

Homework Helper
Not Rated (0)
Status NEW Posted 19 May 2017 03:05 AM My Price 12.00

Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k Y-----------ou -----------for----------- us-----------ing----------- ou-----------r w-----------ebs-----------ite----------- an-----------d a-----------cqu-----------isi-----------tio-----------n o-----------f m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l

Not Rated(0)
Relevent Questions