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NEW QUESTION: 1
Consider the following information:
30-day treasury rate (Risk Free rate) 7.2%
Company XYZ Bond yield 10.2%
Beta 0.8
Risk Premium 4.0%
Credit Rating B-
Calculate Company XYZ's cost of retained earnings using the Bond-Yield-plus-Risk-Premium approach.
A. 12.2%
B. 17.4%
C. 15.2%
D. 11.36%
E. 5.2%
F. 14.2%
Answer: F
Explanation:
Explanation/Reference:
Explanation:
To estimate a firm's cost of retained earnings using the Bond-Yield-plus-Risk-Premium approach, simply take the company's bond yield and add the risk premium. In this case the cost of retained earnings
10.2% + 4.0% = 14.2%.
NEW QUESTION: 2
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B. FC
C. SAS
D. IB
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Explanation/Reference:
Reference: http://www.netapp.com/us/products/storage-systems/e5400/e5400-tech-specs.aspx
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