Investments I: Fundamentals of Performance Evaluation

Suppose debt is 20% of a firm’s capital structure and equity is 80%. The required return on the firm’s debt is 5%, and the required return on the firm’s equity is 12%. Suppose there is zero corporate tax. What is the firm’s weighted average cost of capital (WACC)?

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Investments I: Fundamentals of Performance Evaluation | Online Course Support

Suppose you have a portfolio that is 30% in the risk-free asset and 70% in a stock. The stock has a standard deviation of 0.30 (i.e., 30%). What is the standard deviation of the portfolio?

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5. Question 5 Suppose you have a portfolio that is 30% in the risk-free asset and 70% in a stock. The stock has a standard deviation of 0.30 (i.e., 30%)….