The cost of equity for a firm is 20%. If the real interest rate is 5%, the inflation premium is 3%, and the market risk premium is 2%, what is the investment risk premium for the Firm

Answers

Answer 1

Answer: 10%

Explanation:

Investment risk premium is used to determine the returns an investor makes in excess of real interest rates, inflation and the market return;

= Cost of Equity - Real interest rate - Inflation premium - Market risk premium

= 20% - 5% - 3% - 2%

= 10%

Related Questions

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority?

Answers

Hello. You forgot to enter the answer options. The response options are:

Location

Market conditions

Conditions of sale

Physical characteristics

Answer:

Physical characteristics

Explanation:

The physical characteristics of the analyzed system, must have priority in determining the approach of comparing sales to value. This is because these characteristics have a strong influence on the composition of the product and the constancy of sales, in addition to determining the entire functioning of the system.

The one of the element that has the highest priority is Physical characteristics

The following information should be considered:

The physical characteristics of the analyzed system, must have priority in determining the approach of comparing sales to value. This is due to the characteristics that contains a strong influence on the composition of the product and the constancy of sales, in addition to measure the overall functioning of the system.

Learn more: brainly.com/question/16911495

When an organization defines itself and its niche in an environment by the choice of what sector or field of the environment it will use its technology, products, and services to compete in and serve, it is describing its ______.

Answers

Answer:

Domain

Explanation:

It should be noted that When an organization defines itself and its niche in an environment by the choice of what sector or field of the environment it will use its technology, products, and services to compete in and serve, it is describing its Domain. Domain can be regarded as the chosen field of action for an organization/company, it encompass the part of the environment chosen by the organization which is vital to the organization, it involves the chosen niche of the organization in the environment.

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