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Business, 07.11.2019 22:31 willsimcoe2891

Dqz telecom is considering a project for the coming year, which will cost $50 million. dqz plans to use the following combination of debt and equity to finance the investment. issue $15 million of 20-year bonds at a price of 101, with a coupon rate of 8 percent, and flotation costs of 2 percent of par. use $35 million of funds generated from (retained) earnings. the equity market is expected to earn 12 percent. u. s. treasury bonds are currently yielding 5 percent. the beta coefficient for dqz is estimated to be .60. dqz is subject to an effective corporate income tax rate of 40 percent. compute dqz's expected rate of return using the capital asset pricing model (capm).

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Dqz telecom is considering a project for the coming year, which will cost $50 million. dqz plans to...
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