SuperSky Plc issued shares, where the covariance between the SuperSky Pic shares and the UK stock market index is 24, while the variance of the market is 30. The yield on the UKtreasury bills (gilts) currently is 5%, and the return on the UK stock market index is 13%. What is the company's cost of equity?OA 13%OB 11.4%OC. 15.4%OD. None of the options are correct

Answered: Image /qna-images/answer/d1985b1b-4940-4d37-957e-54517d4109b5.jpg

SuperSky Pic issued shares, where the covariance between the SuperSky Pic shares and the UK stock market index is 24, while the variance of the market is 30. The yield on the UK treasury bills (gits) currently is 5%, and the return on the UK stock market index is 13%. What is the company's cost of equity? OA 13% OB 114% OC 15.4% OD. None of the options are correct

SuperSky Pic issued shares, where the covariance between the SuperSky Pic shares and the UK stock market index is 24, while the variance of the market is 30. The yield on the UK treasury bills (gits) currently is 5%, and the return on the UK stock market index is 13%. What is the company's cost of equity? OA 13% OB 114% OC 15.4% OD. None of the options are correct

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Raysut Cement has a preferred share issue outstanding with a current price of OMR 26.57. The firm is expected to pay a dividend of OMR 1.86 per share a year from today. What is the firm's cost of preferred equity? Select one A. 10 B. 9 C. None of these D. 7
Raysut Cement has a preferred share issue outstanding with a current price of OMR 26. The firm is expected to pay a dividend of OMR 2.86 per share a year from today. What is the firm's cost of preferred equity? Select one: O a. None of these O b. 7 О с. 11 O d. 10
Question 2 The following information relates to A Ltd and B Ltd Two companies which operate in the same industry and listed on the stock markets. All figures are in Ghana Cedis Summarized Profit and Loss Account A. Ltd. 80,000 B Ltd Operating profit 80,000 Interest paid 10,000 40,000 Profit after interest 70,000 Dividend paid 20,000 40,000 25,000 Retained Profit 15.000 50.000 Summarized Balance Sheet A Ltd. B Ltd Total Assets less Current liabilities 600,000 600,000 Financed by: Ghc 1.00 Ordinary shares 100,000 100,000 Reserves 100,000 400,000 10% Unsecured Loan stock 400.000 100.000 600.000 600.000
Alpha Inc., Beta Inc. and Gamma Inc. are three companies with shares listed in the stock exchanges in Italy, France and Greece respectively. An analyst collects the following information about the three companies. Company Beta Risk-free rate Alpha Inc. 0.74 4.90% Beta Inc. 1.00 6.00% Gamma Inc. 1.07 4.75% The US equity risk premium is 4%. What is the estimate for Alpha Inc.'s cost of equity capital?
10. Assume UK company JUP has debt with a book value of £24 million, trading at 120% of par value. The firm has book value of equity of £28 million, and 2 million shares trading at £20 per share. What weights should JUP use in calculating its WACC? A. 41.86% for debt, 58.14% for equity B. 37.67% for debt, 62.33% for equity C. 33.49% for debt, 66.51% for equity D. 29.30% for debt, 70.70% for equity
On a particular date, FedEx has a stock price of $88.24 and an EPS of $7.36. Its competitor, UPS, had an EPS of $0.30. What would be the expected price of UPS stock on this date, if estimated using the method of comparables? Question content area bottom Part 1 A.$5.40 B. $7.19 C.$8.00 D.$3.60
Determine the cost of common stock (equity). The T-Bill rate is 5.2%. The Market Return is 12.7%. What is the company's cost of equity capital if the company has a beta of 1.27? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %
2. The market value of the stocks of Sun Corporation at the beginning of year 1 is P150 per share; at the beginning of year 2 is P180. It declares divided of P20 per share. What is the holding period return from the said investment?
Here is some information about Stokenchurch Inc.: Beta of common stock = 1.2 Treasury bill rate = 4% Market risk premium = 6.5% Yield to maturity on long-term debt = 7% Book value of equity = $340 million Market value of equity = $680 million Long-term debt outstanding = $680 million Corporate tax rate = 21% What is the company's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) WACC %
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7. Determine the P/E ratio of the company ZYX if you know that the number of company's outstanding shares is 18,000,000. The current market price of the company corresponds to 588.5 per share. The company's intrinsic value is 654 per share. The expected return for investors is 8.7 %. The dividend amounts to 62.4. The EBIT in the given year corresponded to the amount of 481,530,000. a. 24.4 b. 26.6 c. 22 d. 19.7 e. 25 8. Consider the spot rate of 24.36 CZC/EUR. If we assume a payment for goods of 5.000 EUR in two months and the spot rate at that time will be 24.95 CZC/EUR. For hedging purposes, it is possible to arrange a forward on the exchange rate with a fixation of 24.7 CZC/EUR. If the company were to import goods. closing a forward would mean a profit/loss in the amount of: a. 1.250 EUR gain b. 1,700 CZC loss c. 2,950 EUR gain d. 1,250 CZC gain e. 1,250 CZC loss

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