Explain difference between realized return and expect return


Problem

A. Explain the difference between realized return and expected return with illustrations. In finance why are we concerned more with expected return.

B. Using the components of Return on Equity can you explain why increasing debt will increase ROE?

C. The debt to equity ratio for a company is 0.4. The Risk free rate in the market is 7.32% and the beta for the company is 1.28. The market premium is 12.6%. The tax rate for the company is 30%. The Cost of Debt is 8% for the company. If the Debt ratio changes to .6 what will be the WACC for the company.

Request for Solution File

Ask an Expert for Answer!!
Financial Accounting: Explain difference between realized return and expect return
Reference No:- TGS03224602

Expected delivery within 24 Hours