My Homework Help logo
  • Our services
    • Math homework Help
    • Excel Homework Help
    • Case Study Assignment Help | Do My Case Study Homework
    • PowerPoint Presentation Help
    • CIPD Assignment Help
    • Civil Engineering Homework Help – Do My Asssignment For Me
    • CPM Homework Help | Do My CPM Assignment For Me
    • Discussion Board Homework Help
    • Finance Homework Help – Do My Finance Assignment For Me
    • Nursing Homework Help
    • Programming Homework Help
    • SPSS Homework Help | Do My SPSS Assignment For Me Cheap
    • Statistics Homework Help
  • About Us
  • How It Works
  • My account
  • Order now
Order Now
Homework Help

Compute the cost of levered equity based on market Debt to Equity ratio.

1 min read
Posted on 
May 28th, 2023
Home Homework Help Compute the cost of levered equity based on market Debt to Equity ratio.

Company x has the following capital structure…

Multiplying the debt-to-equity ratio of the stock market with the unlevered cost of equity will give you the cost of leveraged equity.

The following formula is used to calculate the unlevered equity cost:
The cost of nonlevered equity = the rate at which risk is not taken + the premium for taking on that risk

The risk-free rate can be calculated by using the 10-year Treasury Bond rate, and the premium for risks is determined by betas that are assigned to asset classes.

If the ratio of market debt to equity (D/E), for example, is 0.5, and the cost of unlevered capital is 12 %, the cost of leveraged equity can then be calculated as follows:

Cost of Levered Equity = 0.5 x 12% = 6%.

Order an Essay Now & Get These Homework Help Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order
Share
Tweet
Share
Tweet
Calculate the price
Pages (275 words)
$0.00
My Homework Help
Company
  • Get Homework Help
  • Home
  • About Us
  • How It Works
Legal
  • About
  • How It Works
How Our Homework Help and Essay Service:
My Homework Help The essays written at My Homework Help are not intended to be forwarded as finalized work, but they can still serve a dual purpose of research and study. My Homework Help does not endorse or encourage any form of plagiarism.
Subscribe
No Spam
  • Math homework Help
  • Excel Homework Help
  • Case Study Assignment Help | Do My Case Study Homework
  • PowerPoint Presentation Help
  • CIPD Assignment Help
  • Civil Engineering Homework Help – Do My Asssignment For Me
  • CPM Homework Help | Do My CPM Assignment For Me
  • Discussion Board Homework Help
  • Finance Homework Help – Do My Finance Assignment For Me
  • Nursing Homework Help
  • Programming Homework Help
  • SPSS Homework Help | Do My SPSS Assignment For Me Cheap
  • Statistics Homework Help
© 2023 My Homework Help. All rights reserved.
My Homework Help will be listed as ‘My Homework Help’ on your bank statement.