Homework answers / question archive / Assume an M&M world with a corporate tax of 40%, a risk free rate of 4% and a market premium of 10%

Assume an M&M world with a corporate tax of 40%, a risk free rate of 4% and a market premium of 10%

Finance

Share With

Assume an M&M world with a corporate tax of 40%, a risk free rate of 4% and a market premium of 10%. If the firm is unlevered and equity beta is 1.6, Find ru (return on unlevered)

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Return on Unlevered = Risk Free Rate + Equity Beta * Market Premium

Return on Unlevered = 4% + 1.60 * 10%

Return on Unlevered = 20%

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)

Related Questions

1 One ancillary service that surplus lines intermediaries perform during the policy period is to Properly remit surplus lines taxes on the insured39s behalf Ensure that the customer participates in state insurance guaranty funds Provide information about the commissions paid by each insurer that quoted the account Verify what reinsurance arrangements exist for the surplus lines insurer 2 To satisfy the diligent search requirement state laws and regulations often specify the Names of insurers that must decline the risk Number of declinations needed Locations of insurers that must decline the risk Amount of time required to complete a diligent search 3 Surplus lines intermediaries Cannot acquire a nonresident license in states other than their home state Are licensed in a resident basis in their home state Must obtain a federal surplus lines broker39s license Are not required to obtain a license in any state
Question 7 15 pts Based to the pecking order theory which one of the following statements is true To satisfy funding needs firms should first use their internal funds then issue debt and lastly issue equity There is no relationship between a firm39s profit level and its debt level There exists an optimal debt ratio that firms should try to reach Only firms will outstanding profitability should consider issuing equity to obtain capital above under any circumstances
18 year bond has a yield to maturity of 6
Brendan hopes to retire in 39 years time after a successful career in finance
The Cardigan family has made a name for themselves in the sweater industry whereby they have designed sweaters for a variety of uses and for a wide target audience ranging from toddlers to business professionals
Based on analysis the company is expected to make 4
What is the quote of a 6 year zero coupon bond with 1000 face value if the yield to maturity is 2
A Dubai newspaper recently carried two advertisements from two different banks
If the objective is to value operating assets net of operating liabilities of a firm then the appropriate free cash flow measure to be used is
In Bloomberg load Telus Corp T CN Equity

menu