The cost of new common equity willQuestion 1 options:a)Increase as flotation

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The consume of new vulgar equity gain

Question 1 options:

a) 

Increase as flotation

consumes extension

b) 

Decrease as flotation consumes extension

c) 

Increase as flotation consumes diminish

d) 

Increase as the tax rebuke extensions

Question 2 (2 points)

Assuming no vary to a gang's aggravateall surrender equalize, if a purpose's render equals the gang's consume of relevant

Question 2 options:

a) 

It should extension the gang's fund require (set-up shareholder riches)

b) 

It should binder the gang's fund require (binder shareholder riches)

c) 

It should diminish the gang's fund require (consume shareholder riches)

d) 

We can't forebode its impression on the gang's fund require

Question 3 (2 points)

Issues of new fund, either vulgar or preferred, entertain a remarkable consume due to

Question 3 options:

a) 

Flotation consumes associated after a while the new childrens

b) 

Shareholder expectations the new children should bring to remarkable renders

c) 

Increased surrender in the gang's relevant constitution

d) 

Risk of dilution of forthcoming earnings

Question 4 (2 points)

Assuming no vary to a gang's aggravateall surrender equalize, if a purpose's render exceeds the gang's consume of relevant

Question 4 options:

a) 

It should extension the gang's fund require (set-up shareholder riches)

b) 

It should binder the gang's fund require (binder shareholder riches)

c) 

It should diminish the gang's fund require (consume shareholder riches)

d) 

We can't forebode its impression on the gang's fund require

Question 5 (2 points)

As the equality of financing extensions,

Question 5 options:

a) 

The consume of relevant may extension

b) 

The consume of relevant may diminish

c) 

The consume of relevant would not be impressioned

d) 

We don't entertain plenty knowledge to determine

Question 6 (2 points)

If a gang is regarding a new purpose and gain finance it completely by vulgar equity, the purpose should be gauged against

Question 6 options:

a) 

The consume of equity

b) 

The consume of obligation

c) 

The consume of preferred equity

d) 

The weighted middle consume of relevant

Question 7 (2 points)

Marginal consume of relevant is

Question 7 options:

a) 

A gauge of the tenuity of renders on an identical fund not-absolute to the communicate

b) 

Relates the surrender-render trade-offs of identical possessions to the communicate renders

c) 

The computed consume of relevant secure by multiplying the consume of each special in the optimal relevant constitution by its weighted endowment in the aggravateall relevant constitution and summing up the consequences

d) 

The consume of the developed dollar of funds raised

Question 8 (2 points)

We use Kn = (D1 / (P0 - F)) + g to calculate

Question 8 options:

a) 

The after-tax consume of obligation

b) 

Cost of vulgar equity

c) 

Cost of new vulgar fund

d) 

Cost of preferred fund

Question 9 (2 points)

Retained earnings

Question 9 options:

a) 

Is one of the most relevant sources of relevant for a gang

b) 

Has a remarkable consume than obligation

c) 

Also represents the consume of vulgar equity

d) 

All of these adduce

Question 10 (2 points)

The optimum relevant constitution

Question 10 options:

a) 

Provides the lowest consume of relevant

b) 

Has the best mix of obligation, preferred fund, and vulgar equity

c) 

Can vary aggravate era as communicate and sturdy provisions vary

d) 

All of these adduce

Question 11 (2 points)

In farsighted the consume of vulgar equity using Ke = (D1 / P0) + g, D1 is the

Question 11 options:

a) 

Price of the fund today

b) 

Dividend at the end of the foremost year (or bound)

c) 

Required rebuke of render

d) 

Constant augmentation rebuke in dividends

Question 12 (2 points)

A gang after a while a WACC of 8.5% is regarding two potential investments. Either gain be financed by obligation consumeing 6%, and Purpose A gain render 8% and Purpose B gain render 7%. Which purpose should the gang agree?

Question 12 options:

a) 

Project A

b) 

Project B

c) 

Neither purpose

d) 

Both purposes

Question 13 (2 points)

In the relevant asset pricing copy, Kj = Rf + B(Km - Rf), Rf is the

Question 13 options:

a) 

Required render on vulgar fund

b) 

Risk-free rebuke of render

c) 

Measure of the unvarnished tenuity of the fund compared to the communicate index

d) 

Return expected in the communicate

Question 14 (2 points)

Which of these would consequence in a inferior after-tax consume of obligation?

Question 14 options:

a) 

Increase in corporebuke tax rebuke

b) 

Decrease in corporebuke tax rebuke

c) 

Increase in the gang's surrender equalize

d) 

None of these would inferior the after-tax consume of obligation

Question 15 (2 points)

The Relevant asset pricing copy is

Question 15 options:

a) 

A gauge of the tenuity of renders on an identical fund not-absolute to the communicate

b) 

Relates the surrender-render trade-offs of identical possessions to the communicate renders

c) 

The computed consume of relevant secure by multiplying the consume of each special in the optimal relevant constitution by its weighted endowment in the aggravateall relevant constitution and summing up the consequences

d) 

The consume of the developed dollar of funds raised


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