MCQ On Cost Of Capital
5 Questions
| Total Attempts: 295
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Questions and Answers
- 1.During planning period, marginal cost to raise a new debt is classified as
- A.
Debt cost
- B.
Relevant cost
- C.
Borrowing cost
- D.
Embedded cost
- 2.Cost of common stock is 14% and bond risk premium is 9% then bond yield is
- A.
1.56%
- B.
5%
- C.
23%
- D.
64.28%
- 3.In weighted average cost of capital, company can affect its capital cost through
- A.
Policy of capital structure
- B.
Policy of dividends
- C.
Policy of investment
- D.
All of above
- 4.Risk associated with project and way considered by well diversified stockholder is classified as
- A.
Expected risk
- B.
Beta risk
- C.
Industry risk
- D.
Returning risk
- 5.Cost of common stock is 13% and bond risk premium is 5% then bond yield is
- A.
$18
- B.
2.60%
- C.
8%
- D.
18%
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