Corporate Finance Homework 12

8 Questions  I  By Cbprice on May 1, 2011
These are the homework questions for Chapter 12 in Corporate Finance.

  

Question Excerpt

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1.  In an efficient market, the cost of equity for a risky firm does which one of the following according to the security market line?
A.
B.
C.
D.
E.
2.  Which one of the following is the primary determinant of an investment's cost of capital?
A.
B.
C.
D.
E.
3.  Lester lent money to The Corner Store by purchasing bonds issued by the store. The rate of return that he and the other lenders require is referred to as the:
A.
B.
C.
D.
E.
4.  The weighted average cost of capital is defined as the weighted average of a firm's:
A.
B.
C.
D.
E.
5.  Katie owns 100 shares of ABC stock. Which one of the following terms is used to refer to the return that Katie and the other shareholders require on their investment in ABC?
A.
B.
C.
D.
E.
6.  Which one of the following is the pre-tax cost of debt?
A.
B.
C.
D.
E.
7.  The cost of preferred stock:
A.
B.
C.
D.
E.
8.  Which one of the following represents the rate of return a firm must earn on its assets if it is to maintain the current value of its securities?
A.
B.
C.
D.
E.
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