Expert Answers

1. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the cost of debt at 20%. The long term treasury bond rate is 5%. Assume the market risk premium is 5.8%. (10 points) Answer format is 12.3 for 12.30% and 17.55 for 17.55%.

2. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the after tax cost of debt at 18%. The long term treasury bond rate is 6%. Assume the market risk premium is 5.9%. (10 points) Answer format is 12.3 for 12.30% and 17.55 for 17.55%.

3. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the weighed after tax cost of debt at 19%. The long term treasury bond rate is 6%. Assume the market risk premium is 5.1%. (10 points) Answer format is 12.3 for 12.30% and 17.55 for 17.55%.

4. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the UNLEVERED BETA. The long term treasury bond rate is 6%. Assume t

5. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the BETA at 20%. The long term treasury bond rate is 5%. Assume the

6.You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the cost of equity at 18%. The long term treasury bond rate is 6%.

 7. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the weighted cost of equity at 18%. The long term treasury bond rate is 7%. Assume the market risk premium is 5.1%. (10 points) Answer format is 12.3 for 12.30% and 17.55 for 17.55%.

8. You have been provided the information on the cost of debt and cost of capital that a company will have at a 10% debt ratio, and asked to estimate the weighted average cost of capital at 18%. The long term treasury bond rate is 6%. Assume the market risk premium is 6.4%. (30 points) Answer format is 12.3 for 12.30% and 17.55 for 17.55%.