The conglomerate H has 2 divisions: A and B, representing 20.0% and 80.0% of the market value of H. By analyzing market participants who operate in the sa as A and B, we conclude that the RoA of A and B are 28.0% and 25.0%. H borrows at the risk-free rate 8.0%. It is financed 40.0% by equity and the rest by debt market risk premium is 20.0%. 1. Calculate the cost of capital for H! 2. Calculate the equity beta of H! ÷ Answer format: 123.12; For a percent value of 12.34% enter 12.34 (without the percent sign); Negative values should be entered with the minus sign. When g choice, pick the result that is correct up to rounding error. "None of the Above" is just as likely to be the correct answer as the others.

The conglomerate H has 2 divisions: A and B, representing 20.0% and 80.0% of the market value of H. By analyzing market participants who operate in the sa as A and B, we conclude that the RoA of A and B are 28.0% and 25.0%. H borrows at the risk-free rate 8.0%. It is financed 40.0% by equity and the rest by debt market risk premium is 20.0%. 1. Calculate the cost of capital for H! 2. Calculate the equity beta of H! ÷ Answer format: 123.12; For a percent value of 12.34% enter 12.34 (without the percent sign); Negative values should be entered with the minus sign. When g choice, pick the result that is correct up to rounding error. "None of the Above" is just as likely to be the correct answer as the others.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 16P

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