The expected return on the market is 12.07%, the risk-free rate is 4.94%, and the tax rate is 22.00%. Semper Fun Sports has 300,000 common shares outstanding that are priced at $41.90 per share and have an expected return of 16.99% and an expected real return of 14.96%. Last year, Semper Fun XSports common stock had a return of 11.04%. The company also has 400,000 shares of preferred stock outstanding that are priced at $15.65 per share and have an expected return of 13.24% and an expected real return of 11.00%. Last year, Semper Fun Sports preferred stock had a return of 8.92%. Finally, the company has 10,000 bonds outstanding with a coupon rate of 9.50%, yield-to-maturity of 4.35%, current yield of 8.79%, face value of $1,000.00, and price of $1,300.00. What is the weighted average cost of capital for Semper Fun Sports?

Air Asia has 1.4 million shares of stock outstanding. The stock currently sells for $20 pershare. The firm’s debt is publicly traded and was recently quoted at 93% of face value. Ithas a total face value of $5 million, and it is currently priced to yield 11%. The risk-freerate is 8%, and the market risk premium is 7%. You’ve estimated that Air Asia has a betaof 0.74. If the corporate tax rate is 34%, what is the Weighted Average Cost of Capital ofAir Asia?

Tyres Limited has asked you to calculate the return on its ordinary shares to help in its calculation of its weighted average cost of capital (WACC). Tyres has 10,000,000 ordinary shares on issue that have a beta of 1.63. The last dividend was $9.56, and dividends have been growing at 2.7% per year. If the risk-free rate is 1.98% and the return on the market is 9.1%. What is the required return on one of Tyres’s ordinary shares?.

Ginger Industries stock has a beta of 1.33. The company just paid a dividend of $.83, and the dividends are expected to grow at 5.3 percent. The expected return on the market is 11.8 percent, and Treasury bills are yielding 5.3 percent. The most recent stock price is $83.00. Calculate the cost of equity using the dividend growth model method. Calculate the cost of equity using the SML method.

The current yield on stock invested in Lynx Corporation is 4.2%.  The dividend last year was $3.25 per share.  What was the selling price of the stock?

Monsters inc recently paid its annual dividend of $2.47 and reported an ROE of 6%. The firm pays out 50% of earnings as dividends. Based on your analysis, you estimate that the stock has a required return of 7%. What is the intrinsic value of this stock?

The expected return on the market is 12.36 %, the risk-free rate is 4.88 %, and the tax rate is 18.00 %. Semper Fun Sports has 310,000 common shares outstanding that are priced at $40.20 per share and have an expected return of 16.96 % and an expected real return of 14.62 %. Last year, Semper Fun Sports common stock had a return of 11.66 %. The company also has 411,000 shares of preferred stock outstanding that are priced at $15.50 per share and have an expected return of 13.36 % and an expected real return of 11.81%. Last year, Semper Fun Sports preferred stock had a return of 13.36%. Finally, the company has 10,000 bonds outstanding with a coupon rate of 9.69 %, yield-to-maturity of 4.70%, current yield of 8.44%, face value of $1,000.00, and price of $1,260.00. What is the weighted average cost of capital for Semper Fun Sports? 9.73% (plus or minus 0.02 percent) O 11.32% (plus or minus 0.02 percent) 12.21% (plus or minus 0.02 percent) 10.98% (plus or minus 0.02 percent) None of the…

Castles in the Sand generates a ROE of 25.0 percent and maintains a payout ratio of 0.6 . Its earnings this coming year will be $ 4.05 per share. Investors expect a return of 14.42 percent on the stock. What is the stocks P/E ratio?

XYZ currently has common stock trading at $40 per share.  XYZ just paid a dividend of $2.00 per share, which is expected to grow at a constant rate of 5%.  XYZ's beta is 1.5, the risk-free rate is 2%, and the market return is expected to be 8%.  The pre-tax yield on XYZ's bonds is 7%.  XYZ's finance department believes that new stock would require a premium of 5% over their own bond yield.  Flotation cost for issuing new stock is 10%. Compute the cost of retained earnings using the bond yield plus risk premium approach (show your answer in percent, and to 2 decimal places. Example: 9.62%).   Question 4 options:

Handy Handbags (HH) recently paid a dividend of $2.00 (D0), which is expected to grow at 7%.  HH’s stock price is $23, its beta is 1.6, the yield on its bonds is 12%, and the risk premium on the company’s own stock is 5%.  The risk-free rate is 6% and the market risk premium is 4%.  Flotation costs will be 10% if Handy issues new common stock. Using the discounted cash flow method, compute the cost of retained earnings for HH:   Question 13 options:   13.3%   18.4%   16.3%   15.7%