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Author Question: Anchor Incorporated has a beta of 1.0. If the expected return on the market is 15, what is the ... (Read 9 times)

tfester

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Anchor Incorporated has a beta of 1.0. If the expected return on the market is 15, what is the
  expected return on Anchor Incorporated's stock?
 
  A) 18
  B) 14
  C) 15
  D) cannot be determined without the risk-free rate

Question 2

Ellis Manufacturing Inc has estimated FCFF for each of the next five years and believes that subsequent cash flows will grow at a constant annual rate of 3 indefinitely.
 
  If FCFF are 4,500,000 in year five, and the cost of capital is 9, what is the value in year five of these terminal value cash flows?
  A) 50,207,200
  B) 75,000,000
  C) 77,250,000
  D) There is not enough information to answer this question.


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Kedrick2014

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tfester

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Reply 2 on: Jul 11, 2018
YES! Correct, THANKS for helping me on my review


mcabuhat

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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