Keys Corporation's 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-
free rate is r* = 2.5%, the inflation premium for 5-year bonds is IP= 1.50%, the liquidity
premium for Keys' bonds is LP = 0.5% versus zero for T-bonds, and the maturity risk
premium for all bonds is found with the formula MRP=(t-1) x 0.1%, where t = number of
years to maturity. What is the default risk premium (DRP) on Keys' bonds?

Take it all away has a cost of equity of 10.63 percent, a pretax cost of debt of 5.33 percent, and a tax rate of 35 percent. the company's capital structure consists of 71 percent debt on a book value basis, but debt is 31 percent of the company's value on a market value basis. what is the company's wacc?

Which of the following is an example of search costs? a.) driving to a faraway place to find available goods b.) buying goods in some special way that is outside the normal channels c.) paying a premium cost for goods d.) selling extra goods for a discount price

Stock a has a beta of 1.2 and a standard deviation of 20%. stock b has a beta of 0.8 and a standard deviation of 25%. portfolio p has $200,000 consisting of $100,000 invested in stock a and $100,000 in stock b. which of the following statements is correct? (assume that the stocks are in equilibrium.) (a) stock b has a higher required rate of return than stock a. (b) portfolio p has a standard deviation of 22.5%. (c) portfolio p has a beta equal to 1.0. (d) more information is needed to determine the portfolio's beta. (e) stock a's returns are less highly correlated with the returns on most other stocks than are b's returns.