Help Below shows Post Holdings, Inc. (ticker: POST)'s revenueby country, and each countries' government bonds rate,CDS spread, equity market volatility, and equity market riskpremium. Post's beta in the U.S. equity market is 0.80. Onaverage, US companies generate 6.0% of total revenue fromChina, 2.7% of total revenue from Japan, 2.4% from UK, and1.9% from Canada.CountryUnitedCanadaUKStates% of Total Revenue - IBM86.15.48.510-Year Government Bonds Yield1.301% 1.242%0.522%CDS Spread1.722%4.793%2.289%Equity Market Volatility10%15%12%Equity Market Risk Premium4.72%4.72%5.31%Q. Assume POST's stock risk exposure to each country riskis proportional to B and country risk premium on eachforeign market is calculated with equity market volatilities.Please calculate the appropriate cost of equity for POST.

Answered: Image /qna-images/answer/c4e60613-835c-4cf0-8882-59eff9d8ceab.jpg

spread, equity market volatility, and equity market risk premium. Post's beta in the U.S. equity market is 0.80. On average, US companies generate 6.0% of total revenue from China, 2.7% of total revenue from Japan, 2.4% from UK, and 1.9% from Canada. Country United Canada UH

spread, equity market volatility, and equity market risk premium. Post's beta in the U.S. equity market is 0.80. On average, US companies generate 6.0% of total revenue from China, 2.7% of total revenue from Japan, 2.4% from UK, and 1.9% from Canada. Country United Canada UH

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 2.3CE

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