If the risk-free rate is 45 percent and the expected return


1. Assuming the following ratios are constant, what is the sustainable growth rate? Total asset turnover = 3.1 Profit margin = 6% Equity multiplier = 1.5 Payout ratio = 20 %

2. A Company has projected operating profit (EBIT) of $500,000, depreciation of $100,400, interest expense of $10,000 and a tax rate of 35%. What is the operating cash flow?

3. The Graber Corporation’s common stock has a beta of 1.4. If the risk-free rate is 4.5 percent and the expected return on the market is 11 percent, what is the company’s cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of equity capital %

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Financial Management: If the risk-free rate is 45 percent and the expected return
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