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finance with a mixed portfolio

If the market value of common stock of a real estate company is 6 million and the value of its debt is 4 million with a beta of 1.5 and the risk premium on the market is 6% and the treasury bill rate is 4% and the debt is risk free and the real estate company pays no tax

What is the required return on the real estate companies stock?

What is the companies cost of capital

What is the companies discount rate for and expansion of the present business

Suppose the company wants to diversify into making vases. The beta of manufactures of vases is 1.2 what is the required return on the companies new venture

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If the market value of common stock of a real estate company is 6 million and the value of its debt is 4 million with a beta of 1.5 and the risk premium on the market is 6% and the treasury bill rate is 4% and the debt is risk free and the real estate company ...

Solution Summary

This solution is comprised of a detailed explanation to answer what is the required return on the real estate companies stock. The companies costs of capital are given.

$2.19