subject
Business, 17.07.2020 18:01 zay179

HH Industries has 50 million shares that are currently trading for $4 per share and $200 million worth of debt. The debt is risk free and has and interest rate of 5%, and the expected return of HH stock is 11%. Suppose a strike causes the price of HH stock to fall 25% to $3 per share. The value of the risk free debt is unchanged. Assuming there are no taxes and the risk of HH's assets is unchanged, what happens to HH's equity cost of capital

ansver
Answers: 2

Another question on Business

question
Business, 22.06.2019 03:00
Match the given situations to the type of risks that a business may face while taking credit.(there's not just one answer)1. beta ltd. had taken a loan from a bankfor a period of 15 years, but its salesare gradually showing a decline.2. alpha ltd. has taken a loan for increasing its production and sales,but it has not conducted any researchbefore making this decision.3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession.4. delphi ltd. has taken a short-term loanfrom the bank, but its supply chain logistics are not in place.a. foreign exchange riskb. operational riskc. term of loan riskd. revenue projections risk
Answers: 1
question
Business, 22.06.2019 13:30
How does hipaa address employee’s access to e-phi?
Answers: 1
question
Business, 22.06.2019 14:40
Which of the following would classify as a general education requirement
Answers: 1
question
Business, 22.06.2019 16:40
Job applications give employers uniform information for all employees,making it easier to
Answers: 1
You know the right answer?
HH Industries has 50 million shares that are currently trading for $4 per share and $200 million wor...
Questions
question
English, 26.10.2021 01:20
question
Mathematics, 26.10.2021 01:20
question
Mathematics, 26.10.2021 01:20
question
History, 26.10.2021 01:20
question
English, 26.10.2021 01:20
Questions on the website: 13722363