Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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3. ABC Corp.’s equity multiplier is 1.25. What is its debt ratio?
4.Easy Corp.’s
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- A firm has total book value of equity of $2 million, a market to book ratio (market price/book value) of 4, and a book value per share of $5.00. What is the market value per share of the firm's equity?arrow_forward3. Company WACC is 20%. Debt interest rate is 4% and D/ E ratio is 1,6. What is the cost of equity? HOW YOU CALCULATE THIS WITH EXCEL AND USING EXCEL FORMULAS?arrow_forwardThe beta of Company’s X equity is equal to 1. Assuming that the company's debt is risk-free, that X's debt to equity ratio is equal to 1, and that there are no taxes, the beta of company X’s assets is 1 1/2 2 2/3arrow_forward
- I want to answer the questionarrow_forwardwhat is the debt to equity ratio if the WACC is0.083 the cost of debt is 0.055 and the cost of equity is 0.15 what is the weight of debt what is the weight of equityarrow_forwardKodi Company has a debt-equity ratio of 1.33. Return on assets is 7.58 percent, and total equity is $665,000. a. What is the equity multiplier? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the return on equity? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c. What is the net income? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. a. Equity multiplier b. Return on equity c. Net income times %arrow_forward
- Suppose your firm has a market value of equity is $500 million and a market value of debt is $475 million. What are the capital structure weights (i.e., weight of equity and weight of debt)? Group of answer choices A) weight of equity is 51.28%, , weight of debt is 48.72% B) weight of equity is 48.72%, , weight of debt is 51.28% C) weight of equity is 47.62%, , weight of debt is 52.38%arrow_forward1. The basic WACC equation The calculation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and common equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure. is the symbol that represents the cost of preferred stock in the weighted average cost of capital (WACC) equation. Bryant Co. has $2.7 million of debt, $2.5 million of preferred stock, and $3.3 million of common equity. What would be its weight on common equity? O 0.23 O 0.32 O 0.26 O 0.39arrow_forwardWhat is the debt ratio for a firm with an equity multiplier of 3.5? ____ 44.09 percent ____ 58.51 percent ____ 66.25 percent ____ 71.43 percentarrow_forward
- In the Merton model of corporate equity which is based on the Black Scholes formula, what is the quantity (S0/KT)? Assume that interest rates are zero (r=0) so the time value of money can be ignored, therefore S0 = ST. (a) Debt-to-equity ratio. (b) Debt-to-assets ratio. (c) Assets-to-debt ratio. (d) Assets-to-equity ratio. (e) Equity-to-assets ratiarrow_forwardA firm has a debt-to-equity ratio of 2. What is its equity multiplier? 01 O 2.5 03 O 1.5 O 2arrow_forwardWhat is the debt ratio for a firm with a debt-equity ratio of 0.5? Multiple Choice O 35% 33.3% 54% 66.7%arrow_forward
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