Business, 30.11.2019 02:31 xxtonixwilsonxx

Barton industries estimates its cost of common equity by using three approaches: the capm, the bond-yield-plus-risk-premium approach, and the dcf model. barton expects next year's annual dividend, d1, to be $2.20 and it expects dividends to grow at a constant rate g = 4.4%. the firm's current common stock price, p0, is $25.00. the current risk-free rate, rrf, = 4.4%; the market risk premium, rpm, = 6.1%, and the firm's stock has a current beta, b, = 1.40. assume that the firm's cost of debt, rd, is 10.36%. the firm uses a 3.1% risk premium when arriving at a ballpark estimate of its cost of equity using the bond-yield-plus-risk-premium approach. what is the firm's cost of equity using each of these three approaches? round your answers to two decimal places. capm cost of equity: % bond yield plus risk premium: % dcf cost of equity: % what is your best estimate of the firm's cost of equity?

Answers: 3

Show answers

Another question on Business

Business, 20.06.2019 18:04

Fdr had to resort to deficit spending with his first 100 days to with the recovery. describe what deficit spending was and how fdr felt about it. do you think think this was the right decision at the time, why or why not?

Answers: 1

Answer

Business, 22.06.2019 12:50

Explain whether each of the following events increases or decreases the money supply. a. the fed buys bonds in open-market operations. b. the fed reduces the reserve requirement. c. the fed increases the interest rate it pays on reserves. d. citibank repays a loan it had previously taken from the fed. e. after a rash of pickpocketing, people decide to hold less currency. f. fearful of bank runs, bankers decide to hold more excess reserves. g. the fomc increases its target for the federal funds rate.

Answers: 3

Answer

Business, 22.06.2019 19:40

Moody corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. at the beginning of the year, the company made the following estimates: machine-hours required to support estimated production 100,000 fixed manufacturing overhead cost $ 650,000 variable manufacturing overhead cost per machine-hour $ 3.00 required: 1. compute the plantwide predetermined overhead rate. 2. during the year, job 400 was started and completed. the following information was available with respect to this job: direct materials $ 450 direct labor cost $ 210 machine-hours used 40

Answers: 3

Answer

Business, 22.06.2019 20:00

After testing its water, a city water department issues a report to the related citizens, noting what chemicals have been identified, their doses, and the estimated risks of exposure at these levels. this report represents a type of

Answers: 1

Answer

You know the right answer?

Barton industries estimates its cost of common equity by using three approaches: the capm, the bond...

Questions