Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. . the level of a companys equity is 20000 lei and

. The level of a companys equity is 20000 lei and its debt ratio is...

80.2K

Verified Solution

Question

Finance

. The level of a companys equity is 20000 lei and its debt ratio is 0,3. In order to implement a project the corporation borrows 40% of the investment outlay at a cost of 8% increasing its debt ratio to 0,5. The beta of the companys stock is 1,2 and the expected return of the market is 10%. The project delivers during the next three years EBITs of 5000 lei, 2800 lei and 2300 lei. a). determine the level of equity used for financing this project.. b). decide whether the project is a good investment knowing that the risk-free rate of return is 7%. NPV=

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students