Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 5 percent, and T-bills are currently yielding 4.2 percent. The company's most recent dividend was $1.40 per share, and dividends are expected to grow at an annual rate of 5 percent indefinitely. If the stock sells for $30 per share, what is your best estimate of the company's cost of equity?

Answers

Answer 1

Answer:

The best estimate of the company's cost of equity is 10.05%.

Step-by-step explanation:

Using growth rate model formula, the cost of equity can be calculated as follows:

Cost of equity as per growth rate model = (D1 / P) + g ................ (1)

D1 = Most recent dividend * (1 + g) = $1.40 * (1 + 0.05) = $1.47

P = Current price per share = $30

g = Growth rate of dividend = 5%, or 0.05

Substituting the values into equation (1), we have:

Cost of equity as per growth rate model = ($1.47 / $30 ) + 0.05

Cost of equity as per growth rate model = 0.099. or 9.90%

Using Capital Asset Pricing Model (CAPM) formula, the cost of equity can be calculated as follows:

Cost of equity as per CAPM = Risk free rate + (Beta * Market risk premium) = 4.2 + (1.2 * 5) = 10.20%

Therefore, we have:

Best estimate of Cost of equity = (Cost of equity as per growth rate model + Cost of equity as per CAPM) / 2 = (9.90% + 10.20%) / 2 = 10.05%

Therefore, the best estimate of the company's cost of equity is 10.05%.


Related Questions

HELP PLEASE I need it abbreviated !

Answers

Answer:

30 inch²

Step-by-step explanation:

a + b/2 x h

8 + 10/2 X 5 = 30

PLSS HELPPP DUEE TODAYY Problem #1 Simplify the expression.

Answers

Answer:

B

Step-by-step explanation:

+/- 7 is the sq root of 49

hope this helps

`what is the sooulition to x + 8 = 25

Answers

Answer:

17

Step-by-step explanation:

Well you have to get x by itself so....

subtract 8 from both sides

25 -8 = 17 there is your answer

Hey there!


x + 8 = 25

SUBTRACT 8 to BOTH SIDES

x + 8 - 8 = 25 - 8


SIMPLIFY IT!

x = 25 - 8

x = 17


Therefore, the answer should be: x = 17


Good luck on your assignment & enjoy your day!


~Amphitrite1040:)

Work out m and c for the line: y+2x=3

Answers

Answer:

m = - 2, c = 3

Step-by-step explanation:

The equation of a line in slope- intercept form is

y = mx + c ( m is the slope and c the y- intercept )

Given

y + 2x = 3 ( subtract 2x from both sides )

y = - 2x + 3 ← in slope- intercept form

with m = - 2 and c = 3

Which expression is equivalent to

Answers

Answer:

B

Step-by-step explanation:

a living room is 20 feet long, 50 feet wide and 12 feet high. how much paint do you need to cover the walls?
a. 2680ft ^2
b. 3680ft ^2
c. 4680ft ^2
d. 1680ft ^2

Answers

Answer:

d

Step-by-step explanation:

Find the value or measure. Assume that all segments that appear to be tangent are tangent. Round answers to the nearest tenth, as needed.

Answers

Answer:

23.26

Steps:

AC=√(10²+21²)

AC=√(100+441)

AC=√541

AC≈23.26

A store purchased jeans for $15 a pair. The store increased the price of the jeans by 65%. One month later, the jeans were on sale for 15 - off the store price. How much would a customer pay for the jeans on sale? Please help

Answers

Answer:

$21.04

Step-by-step explanation:

Steps to take to derive the answer

Determine the price after the price increase of 65%Determine the price after the 15% off

Price after increase increase (100% + increase in price) x purchase price of the jeans

(100% + 65%) x 15

165% x 15

1.65 x $15 = $24.75

Price after the decrease in price = (100% - percentage decrease in price) x price after the 65% increase in price

(100% - 15%) x $24.75

85% x $24.75

0.85 x $24.75 = $21.04

I need help. Do not post a link to a site!

Find the value of each variable.

Answers

Answer:

the answer is x=45⁰ y=45⁰

may I help you

Written in standard form, the equation y = mx + b becomes

Answers

The answer is C because when changing the equation Freon slope form to standard you flip the signs of the variables
The answer would be letter A

Help ASAP!
553.168 L = mL

Answers

1mL = 0.001 L
so 553168mL

Instructions: Find the missing length indicated.

Answers

Answer:If you are following a area of a triangle is bxhx1/2 or bxh/2

1,800

Step-by-step explanation:100x36=3,600/2=1,800

20 POINTS HELP ASAP
determine wether the equation is an identity or not an identity. sin theta/ cos theta

Answers

Answer:

A

Step-by-step explanation:

There are 12 boys and 13 girls in a class. If the teacher randomly chooses a student's name out of a hat, what is the probability it will be a girl?

◯ 48%
◯ 50%
◯ 52%
◯ 92%

Answers

The probability of selecting a girl is 52%

How to determine the probability?

The given parameters are:

Boy = 12

Girl =13

The probability of selecting a girl is:

P(Girl) = Girl/Total

This gives

P(Girl) = 13/(12 + 13)

Evaluate

P(Girl) = 52%

Hence, the probability it will be a girl is 52%


Read more about probability at:

https://brainly.com/question/251701

#SPJ1

hey could somebody help me please :)

Answers

Answer:

Cut them in smaller shapes then find area

Step-by-step explanation:

Utilize as propriedades das potências e resolva 2⁴ * 2⁷ * 2⁵​

Answers

Answer:

65536

Step-by-step explanation:

2 elevado a 4 é 16 e 2 elevado a 7 é 128 e 2 elevado a 5 é 32, multiplique-os e você obterá 65536

In triangle ABC, angle C is a right angle. Find the value of the trig function.
Find the cos(A) if c= 15, a=9, b= 12

Answers

Answer:

its a

Step-by-step explanation:

what is 11 times 1/5

Answers

Answer:

the answer is 2.2

Step-by-step explanation:

I used a calculator

Answer:

2 1/5 I guess

Step-by-step explanation:

If it's wrong then my phone's stu.pid

Divide. (8x2 – 24x + 15) ÷ (2x – 5)

Answers

Answer:

31-24x/2x-5

Step-by-step explanation:

multiply: (16-24x+15)/(2x-5)

calculate: (31-24x)/(2x-5)

write the division as a fraction:  31-24x/2x-5

I need help question in picture

Answers

Area formula of a circle = πr2

π (8.5)2
Area= 226.98

it's is A= pi x r x 2^

diameter is 17 divide by two is the radius

3.14 x 8.5 x 8.5 is 226.865

Nicole washed 4/10 of a bag of potatoes.She left the rest in a basket outside what amount of potatoes did Nicole leave outside?

Answers

Answer:

6/10 Simplified: 3/5 of a bag

Step-by-step explanation:

One bag= 10/10

She washed 4/10

So, 10/10-4/10=6/10

6/10=3/5

3/5 of a bag

Hope this helped! :)

Stay safe and have a wonderful day/night!!!!!

Please consider rating and giving thanks, if this helped you!

Which statement accurately describes the graph 2y=4x+8?


IM IN A TEST HURRY PLEASE!!

Answers

You didn’t give us the statements, send a picture or something.

The statement which describes the given line the best is required.

The correct statement is an increasing line that passes through [tex](0,4)[/tex]

Equation of lines

The given equation is [tex]2y=4x+8[/tex]

Two points of the line are

[tex]x=0[/tex]

[tex]2y=0+8\\\Rightarrow y=4[/tex]

[tex](0,4)[/tex]

[tex]y=0[/tex]

[tex]0=4x+8\\\Rightarrow x=-2[/tex]

[tex](-2,0)[/tex]

The line passes through points [tex](0,4),(-2,0)[/tex]

The slope intercept form of the line is

[tex]y=\dfrac{4x+8}{2}\\\Rightarrow y=2x+4[/tex]

The slope is [tex]2[/tex]

Since, the slope is positive the line is increasing.

Learn more about equation of lines:

https://brainly.com/question/13763238

help please????????????​

Answers

Answer:

1st one is correct ....................

Answer:

x = 8, y = 12

Step-by-step explanation:

Since the triangles are congruent, we know that the parallel sides are equal to each other.

So,

4x - 7 = 3x + 1

4x - 3x = 1 + 7

x = 8

x + y = 20

8 + y =20

y = 20 - 8

y = 12

Vanessa throws a tennis ball in the air. The function h(t) = -15t2 + 45t + 10 represents the distance in feet, that the ball is from the ground at any time in seconds, t. What is the maximum height of the ball?

Answers

Answer:

43.75feet

Step-by-step explanation:

Given the height of the tennis ball expressed as;

h(t) = -15t^2 + 45t + 10

At maximum height, the velocity of the ball is zero

v = dh/dt

dh/dt = -30t + 45

Since dh/dt = 0, hence;

0 = -30t + 45

30t = 45

t = 45/30

t = 3/2

t = 1.5secs

Substitute t = 1.5 into the expression given

h(1.5) = -15(1.5)^2 + 45(1.5) + 10

h(1.5) = -15(2.25)+67.5+10

h(1.5) = -33.75+77.5

h(1.5) = 43.75feet

Hence the maximum height of the ball is 43.75feet

Can someone plz help me with this !!!

Answers

Answer:

Yes!

Step-by-step explanation:

The y = -17

The x = 18

y = x-35

-17 does equal 18 - 35

Hope that helps!

Step-by-step explanation: no it dosent i dont think

Find the value or measure. Round answers to the nearest hundredth, as needed.

Answers

Don’t click linkkkkkkkkkkkkk

What is the equation of the line that passes through the point (-6,3) and has a
slope of -1/6?

Answers

Answer:

y = -1/6x + 2

Step-by-step explanation:

Put it in point-slope form:

y - 3 = -1/6(x + 6)

y -3 = -1/6x - 1

y = -1/6x + 2

PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!! PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!! PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!! PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!!PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!! PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!! PLSSS HELPPPP I WILLL GIVE YOU BRAINLIEST!!!!!!

Answers

Answer:

268.083

Step-by-step explanation:

volume of a sphere = 4/3 times pi times r^3. 4/3(pi)(4^3) = 268.083

If one side of a triangle is 87 and the other side is 52, what is the measurement of the other side?

Answers

Answer:

87+52=139 180-139 = 41

41 is the measurement of the other side

Step-by-step explanation:

Someone help plz make sure it’s right :)

Answers

Answer:

6 m

Step-by-step explanation:

By Pythagoras Theorem:

[tex]x = \sqrt{ {10}^{2} - {8}^{2} } \\ \\ x = \sqrt{100 - 64} \\ \\ x = \sqrt{36} \\ \\ x = 6 \: m[/tex]

Step-by-step explanation:

10² = 8² + x²

x² = 10² - 8²

x² = 36

x = √36

x = 6

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