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Author Question: Martha' s Interiors has a current beta of 1.2. The market risk premium is 6 percent and the ... (Read 46 times)

Garrulous

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Question 1

If Fluppy Dog Grooming shareholders require a 20% return, what is the dividend growth rate if the dividend yield is 12%?
◦ 32%
◦ 6%
◦ 20%
◦ 12%
◦ 8%

Question 2

Martha' s Interiors has a current beta of 1.2. The market risk premium is 6 percent and the risk-free rate of return is 4 percent. By how much will the cost of equity increase if the company completes an acquisition such that their company beta rises to 1.4?
◦ 0.12 percent
◦ 0.24 percent
◦ 1.20 percent
◦ 2.40 percent
◦ 2.47 percent


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Marked as best answer by Garrulous on Apr 25, 2021

amit

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Garrulous

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Reply 2 on: Apr 25, 2021
Thanks for the timely response, appreciate it


smrtceo

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Reply 3 on: Yesterday
Excellent

 

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