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Author Question: Pan American Airlines' shares are currently trading at $69.25 each. The yield on Pan Am's debt is 4% ... (Read 52 times)

MGLQZ

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Pan American Airlines' shares are currently trading at $69.25 each. The yield on Pan Am's debt is 4% and the firm's beta is 0.7. The T-Bill rate is 4% and the expected return on the market (E (kM)) is 9%. The company's target capital structure is 25% debt and 75% equity. Pan American Airlines pays a combined federal and state tax rate of 35%. What is Pan Am's cost of equity?
◦ 7.0%
◦ 7.5%
◦ 8.0%
◦ 8.5%
◦ 9.0%


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Marked as best answer by MGLQZ on Apr 25, 2021

lolol

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MGLQZ

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review


parshano

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Reply 3 on: Yesterday
Gracias!

 

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