Hello these are Accounting questions please answer the questuins and show me your work and...
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Accounting
Hello these are Accounting questions
please answer the questuins and show me your work and how you get the answer as soon as possible
Q1)
Assume that a company has a beta of .85 and the risk-free rate is 4%. If the market risk premium is 8% calculate cost of equity capital, using the capital asset pricing model.
Select one:
A. 12.88%
B. 8.00%
C. 6.80%
D. 10.80%
Q2)
Determine the present value of an 8 year annuity that pays $11,000 at the end of each year discounted at a rate of 6%.
Select one:
A. $69,015
B. $66,000
C. $88,000
D. $68,308
Q3)
George forecasts a $1.00 dividend for 2017, $1.10 dividend for 2018 and a $1.20 dividend for 2019 for Mikayla Corporation. For all years after 2019, George forecasts that Mikayla Corporation will pay a $1.30 dividend. Using the dividend discount valuation model, determine the intrinsic value of Mikayla Corporation, assuming the companys cost of equity capital is 8%.
Select one:
A. $18.33
B. $15.72
C. $16.25
D. $14.57
Q4)
The following data pertains to Radek Corp., a manufacturer of office supplies. Dollar amounts in thousands.
Total assets | $8,731 |
Interest-bearing debt | $4,239 |
Average borrowing rate for debt | 10.0% |
Common equity: |
|
Book value | $3,130 |
Market value | $16,284 |
Marginal income tax rate | 35% |
Market equity beta | 1.33 |
Assuming that the risk-free rate is 5.3% and the market risk premium is 7.3%, calculate Radek's cost of equity capital, using the capital asset pricing model.
Select one:
A. 14.35%
B. 15.01%
C. 9.71%
D. 7.05%
Q5)
The following data pertains to Radek Corp., a manufacturer of office supplies. Dollar amounts in thousands.
Total assets | $8,731 |
Interest-bearing debt | $4,239 |
Average borrowing rate for debt | 10.0% |
Common equity: |
|
Book value | $3,130 |
Market value | $16,284 |
Marginal income tax rate | 35% |
Market equity beta | 1.33 |
Calculate Radek's cost of debt capital.
Select one:
A. 10.00%
B. 6.50%
C. 3.50%
D. 13.30%
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