Mihov Inc Hired You as a Consultant to Help Estimate Its

question 11

Multiple Choice

Mihov Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data. (1) : rd = yield on the firm's bonds = 7.00% and the risk premium over its own debt cost = 4.00%. (2) rRF = 5.00%, RPM = 6.00%, and b = 1.25. (3) D1 = $1.20; P0 = $35.00 and g = 8.00% (constant) . You were asked to estimate the cost of equity based on the three most commonly used methods and then to indicate the difference between the highest and lowest of these estimates. What is that difference?

• A) 1.13%
• B) 1.50%
• C) 1.88%
• D) 2.34%

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Definitions:

Participant Observation

A research method where the researcher immerses themselves in the social setting they are studying, often participating in the everyday activities of the group while observing them.

Survey Research

is a research method involving the collection of data from a predefined population through questionnaires or interviews to study opinions, behaviors, or characteristics.

Strengths Weaknesses

An evaluation framework used to identify positive attributes and areas needing improvement within entities such as organizations, individuals, or projects.

Stages Research

The examination of processes or phenomena in sequential phases or stages to understand their development over time.