Company Y has the following capital structure: Security Beta Total Market Value ($ millions) Debt...
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Finance
Company Y has the following capital structure: Security Beta Total Market Value ($ millions) Debt 0 $150 Preferred stock 0.20 $50 Common stock 1.80 $400
What is the firm's total market value (total capital)? $__________________ (enter an integer value in $ millions)
What is the firms "tota"l asset's beta? (Hint: What is the beta of a portfolio of all the firms securities?) ____________________(enter a value with three decimal places like x.xxx) Assume that the CAPM is correct.
What discount rate should the company use for its investments? Assume a risk-free interest rate of 4% and a market risk premium of 7%. Ignore taxes. ______________% (enter a percentage value with two decimal places.)
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