Hampton Corporation has a beta of 1.47 and a marginal tax rate of 21%. The expected return on the market is 15% and the risk-free interest rate is 4.49%. Estimate the firm's cost of internal equity. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE % SIGN. IF YOUR ANSWER IS 7.7000%, FOR EXAMPLE, ENTER 7.70.

Hampton Corporation has a beta of 1.47 and a marginal tax rate of 21%. The expected return on the market is 15% and the risk-free interest rate is 4.49%. Estimate the firm's cost of internal equity. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE % SIGN. IF YOUR ANSWER IS 7.7000%, FOR EXAMPLE, ENTER 7.70.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 14P

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