Entries by mary WAMBUGU

Jedi Enterprises stock trades for $45 per share.

August 26, 2019 in /by

Jedi Enterprises stock trades for $45 per share. It is expected to pay a $1.6 dividend at year end, and the dividend is expected to grow at a constant rate of 2.1% a year. The before-tax cost of debt is 5.4%, and the tax rate is 35%. The target capital structure consists of 40% debt and 60% common equity. What is the company’s WACC (in percent) if all the equity used is from reinvested earnings?   […]

 

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A stock has a beta of 0.5 and an expected return of 9.6 percent. A risk-free asset currently earns 3.3 percent. If a portfolio of the two assets has an expected return of 12 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

August 26, 2019 in /by

A stock has a beta of 0.5 and an expected return of 9.6 percent. A risk-free asset currently earns 3.3 percent. If a portfolio of the two assets has an expected return of 12 percent, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places.)   Looking for a Similar Assignment? […]

 

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Both Bond A and Bond B have 7.2 percent coupons and are priced at par value. Bond A has 9 years to maturity, while

August 26, 2019 in /by

Both Bond A and Bond B have 7.2 percent coupons and are priced at par value. Bond A has 9 years to maturity, while Bond B has 15 years to maturity. If interest rates suddenly rise by 2 percentage points, what is the difference in percentage changes in prices of Bond A and Bond B? […]

 

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Bond P is a premium bond with a coupon of 8.3 percent , a YTM of 6.64 percent, and 16 years to maturity.

August 26, 2019 in /by

Bond P is a premium bond with a coupon of 8.3 percent , a YTM of 6.64 percent, and 16 years to maturity. Bond D is a discount bond with a coupon of 8.3 percent, a YTM of 9.64 percent, and also 16 years to maturity. If interest rates remain unchanged, what is the difference in the prices of these bonds 9 […]

 

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