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P. Lange Inc. hired your consulting firm to help them estimate the cost of equity

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9. P. Lange Inc. hired your consulting firm to help them estimate the cost of equity. The yield on Lange's bonds is 7.25%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 3.50% over a firm's own cost of debt. What is an estimate of Lange's cost of equity from retained earnings?;a. 10.75%;b. 11.18%;c. 11.63%;d. 12.09%;e. 12.58%

 

Paper#32611 | Written in 18-Jul-2015

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