Question: Risk free rate is 3%. Equity risk premium is 5%.
- Risk free rate is 3%. Equity risk premium is 5%. Beta is 2. Using the Capital Asset Pricing Model, compute the cost of equity capital.
- Earnings before Interest and Taxes is 200. Depreciation is 50. Capital Expenditure is 55. Net additions to Working Capital is 20. Taxes are 25. Compute Cash Flow From Assets (CFFA).
- If Net Present Value (NPV) is greater than Zero, you:
- Accept the project.
- Reject the project.
- Flip a coin. d. Sleep on it.