Rudolph's Transportation has an overall cost of equity of 14.8 % and a beta of 1.4. The firm is financed solely with common stock. The risk-free rate of return is 3.5 %. What is an appropriate cost of capital for a division within the firm that has an estimated beta of 1.3?
A) 13.26 %
B) 13.42 %
C) 13.48 %
D) 13.74 %
E) 13.99 %
Correct Answer:
Verified
Q139: Rosie's Grill has a beta of 1.2,
Q140: Anthony's Antiques, Inc. has preferred stock outstanding
Q141: Lumber Jack Log Homes has 30,000 bonds
Q142: Given the following information for Jano Corp.
Q143: Given the following information, what is your
Q145: The Delta Co. owns retail stores that
Q146: Wilson's Clothing has 8 % preferred stock
Q147: Outside Johnnie's has a beta of 1.3
Q148: Sun Lee Importers has a cost of
Q149: Treasury bills currently have a return of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents