Localfund.com - All about Fund and Investment
*Home>>>Debt Financing

How do i calculate the cost of equity?


This is a finance hw question and this is the info I have from the question:
unlevered beta=1.10
No current debt but changing it's captial structure to be 40%debt and 60%equity
tax rate=40%
Rfr=5%
mkt risk premium= 4%

If you want to calculate it with the debt use this formula.

http://www.investopedia.com/terms/w/wacc...

If you just want to calculate the cost of equity use the Capital Asset Pricing Model

http://www.investopedia.com/terms/c/capm...

Tags
  Easy Money   Easy Investing   Earn Money   Direct Investment   Debt Financing   Capital Investment   Business Investment   Business financing
Related information
  • Building up more credit?

    Here is credit in a nutshell. when you apply for credit a bank looks at your total credit to available credit percentage. If you have a total credit limit of 1000.00 and you used 1000.00 your pe...

  • Saving Money?

    First you probably need to prioritize your desires. Is saving money, paying down your debt, moving out of your mother's house, not paying rent or owning your own home the most important? Wh...

  • Mortgage Loan Modification?

    I would take a very hard look at the consumer debt. The interest rates on consumer debt are generally very high. I would call the credit card companies where you have balances and remind the...

  • I am working out WACC of Astra Zenica?

    just the debt equity ratio

    ...
  • How can I raise a low credit score?

    You're right. Paying off the debt is not likely to help you raise your score because they'll be on your account from here on out for the next 7 years. Start by cleaning up your credit rep...

  • Why wont they accept me????

    start putting somethings into your name or joint name ie: power, gas tv licence and get your name and address on the electoral role, but be careful in giving money to other people, even if it is yo...

  • What sidejobs are best for college students?

    Actually, studies have shown that people who work part-time while in school do better than students we don't. There are 168 hours in a week and depending on how many credit hours you are enro...

  • Is the Orchard bank credit card really good to apply for??

    Read the disclosure paperwork first. I had a bankruptcy four years ago and needed to build credit. So I got one a year and a half ago with a $300 limit and it helped my credit score immensely. N...

  •  

    Categories--Copyright/IP Policy--Contact Webmaster