You are considering buying Goggle stock and see the beta is 1.25, the risk-free rate is 3%, and the expected return on the market is 8%. What is the required return on Goggle?

Because depository institutions are funded by small investments (such as checkings and savings of individuals), they face less regulation than those funded by larger investments.

Credit Unions are not considered depository institutions because they have members instead of customers.

Financial Institutions transform funds by term, risk, and size.

In the video about markets and institutions, Professor Moser discussed a transaction between:

With your sensitivity completed, what are your two “breakeven” numbers?  What would you finally tell Johnny Inept about whether he should proceed with the Buccaneers project?    

Assume you own NNN Corp. that has $100 million in cash and $750 million in debt.  The company is generating free cash flow of $125 million per year starting this year and will grow at 7% per year for the foreseeable future.  If the weighted average cost of capital is 12%, what is the firm’s equity value per share if they have 100 million shares outstanding?

Rearden Metals has a current stock price of $32 share, is expected to pay a dividend of $1.50 in one year, and its expected price right after paying that dividend is $34. Rearden’s equity cost of capital is closest to:

Frod Perfect, Inc. issued bonds with a 7% coupon rate, semi-annual payments and 30 years to maturity.  You purchased these bonds when they were issued at par value 5 years ago. You are considering selling the bonds today.  The market rate on these bonds has fallen to 6%.  If you sell these bonds today, what will be your realized return (choose the closest answer)?

Benefactor Cumbersome has $15 million in debt with a cost of 4%, $5 million in preferred stock with a cost of 6%, and $50 million in equity with a cost of 10%.  If the tax rate is 21%, the weighted average cost of capital is closest to: