Hampton Corporation has a beta of 1.63 and a marginal tax rate of 34%. The expected return on the market is 12% and the risk-free interest rate is 2.50%. 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 1.63 and a marginal tax rate of 34%. The expected return on the market is 12% and the risk-free interest rate is 2.50%. 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.
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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