The risk free rate is 5%, the expected market return is 11%
A firm has Total invested capital of $5,000.
If the firm had no debt its beta would be 1.0
It has $500 in debt and its tax rate is 40%
1. Use the firms levered Beta to calculate its required return at this level of debt.
17.63%
11.4%
7.62%
9.3%
2. In writing, an "orphan" is:
a paragraph's opening line alone at the end of a page
a paragraph's closing line alone at the top of a page
a justified line ending
a series of short paragraphs
3. Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 9.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.)
8.12%
7.88%
7.96%
8.04%
8.20%