Homework Answers
The correct answer is Option B
The Firm cost of the capital is the weighted average cost of the capital that the firm has to pay to the investors in return of the capital used, the capital mainly consists of the Debt and the equity, and the firm has to pay the dividends and the Interest to them which makes up the cost of capital.
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A firm's cost of capital is: Select one: O a. the cost a fimm incurs while...
(Select all relevant.] A firm's marginal cost of capital is the weighted average of the cost of the debt and equity...
(Select all relevant.] A firm's marginal cost of capital is the weighted average of the cost of the debt and equity provided to the company by all investors and creditors. rate of return the firm must earn on its investments, in order to maintain its stock price. minimum rate of return that investors require for providing capital to the company discount rate used to evaluate the cash flows of investment projects with the same risk as the firm's existing assets....
When estimating a firm's cost of capital, which of the following is NOT one of the...
When estimating a firm's cost of capital, which of the following is NOT one of the four mistakes to avoid? A. Base the cost of debt on the coupon rate on a firm's existing debt. B. Never use the current book value capital structure to obtain the weights when estimating the WACC. C. Always remember that capital components are funds that come from investor. D. When estimating the market risk premium for the CAPM method, never use the historical average...
The company cost of capital is the appropriate discount rate for a firm's Select one: a....
The company cost of capital is the appropriate discount rate for a firm's Select one: a. risk-free projects b. average-risk projects c. high-risk projects d. low-risk projects
Which is true for a firm's overall cost of equity: Select one: a. It is generally...
Which is true for a firm's overall cost of equity: Select one: a. It is generally less than the firm's after-tax cost of debt b. It is generally less than a leveraged firm's WACC c. It is dependent on growth rate and risk level of the firm d. li is unaffected by changes in the market risk premium Which one of the following is the primary determinant of a firm's cost of capital? Select one: a. Use of Funds b....
The Cost of Capital: Introduction Companies issue bonds, preferred stock, and common equity to raise capital...
The Cost of Capital: Introduction
Companies issue bonds, preferred stock, and common equity to
raise capital to invest in capital budgeting projects. Capital is a
necessary factor of production, and like any other factor, it has a
cost. This cost is equal to the -Select-security analyst'smarginal
investor'scompany vendor'sItem 1 required return on the applicable
security. The rates of return that investors require on bonds,
preferred stocks, and common equity represent the costs of those
securities to the firm. Companies estimate...
A firm's net cash flow from operating activities is not affected by: Select one: O A....
A firm's net cash flow from operating activities is not affected by: Select one: O A. Cash paid for interest B. Cash paid to suppliers OC. Cash received for income tax refunds D. Cash received from customers O E. None of the above
Which of the following statements is FALSE? A. A firm's cost of equity capital is directly...
Which of the following statements is FALSE? A. A firm's cost of equity capital is directly related to investors' required rate on the firm's stock. B. When using the dividend growth model to estimate required return, the sustainable growth rate may be used to approximate the growth rate in dividends. C. A firm's cost of debt may be estimated using the average coupon rate on the firm's bonds. D. The capital asset pricing model may be a preferred option for...
YAKO The shape of the Total Fixed Cost (TFC) Curve is: RSITY Select one: YAKIN O...
YAKO The shape of the Total Fixed Cost (TFC) Curve is: RSITY Select one: YAKIN O a. Vertical O b. None of the above O C.45 degree line. O d. Horizontal SITY IVER If marginal cost exceeds marginal revenue at a firm's current level of output, the firm can increase profit if increases its level of output Select one: YAKI O True RSITY False The shape of the Total Fixed Cost (TFC) Curve is: Select one: O a Vertical O...
Which of these curves is the competitive firm's short-run supply curve? . Select one: a. the...
Which of these curves is the competitive firm's short-run supply curve? . Select one: a. the average total cost curve above marginal cost n b. the marginal cost curve above average variable cost C. the average variable cost curve above marginal cost O d. the average fixed cost curve
What is "Organic" funding? vered =of Jestion Select one: O a. Money for product development/marketing that...
What is "Organic" funding? vered =of Jestion Select one: O a. Money for product development/marketing that comes from company's own revenues. b. Start-up funding that comes from friends, family, and fools. C. The first outside money a startup attracts. d. Funding a business from the founder's own savings. According to Michael Porter, what factors are external to the company? Select one: a. strengths and weaknesses O b. strengths and opportunities C. opportunities and threats d. threats and weaknesses All of...
(Select all relevant.] A firm's marginal cost of capital is the weighted average of the cost of the debt and equity provided to the company by all investors and creditors. rate of return the firm must earn on its investments, in order to maintain its stock price. minimum rate of return that investors require for providing capital to the company discount rate used to evaluate the cash flows of investment projects with the same risk as the firm's existing assets....
Which is true for a firm's overall cost of equity: Select one: a. It is generally less than the firm's after-tax cost of debt b. It is generally less than a leveraged firm's WACC c. It is dependent on growth rate and risk level of the firm d. li is unaffected by changes in the market risk premium Which one of the following is the primary determinant of a firm's cost of capital? Select one: a. Use of Funds b....
The Cost of Capital: Introduction
Companies issue bonds, preferred stock, and common equity to
raise capital to invest in capital budgeting projects. Capital is a
necessary factor of production, and like any other factor, it has a
cost. This cost is equal to the -Select-security analyst'smarginal
investor'scompany vendor'sItem 1 required return on the applicable
security. The rates of return that investors require on bonds,
preferred stocks, and common equity represent the costs of those
securities to the firm. Companies estimate...
A firm's net cash flow from operating activities is not affected by: Select one: O A. Cash paid for interest B. Cash paid to suppliers OC. Cash received for income tax refunds D. Cash received from customers O E. None of the above
YAKO The shape of the Total Fixed Cost (TFC) Curve is: RSITY Select one: YAKIN O a. Vertical O b. None of the above O C.45 degree line. O d. Horizontal SITY IVER If marginal cost exceeds marginal revenue at a firm's current level of output, the firm can increase profit if increases its level of output Select one: YAKI O True RSITY False The shape of the Total Fixed Cost (TFC) Curve is: Select one: O a Vertical O...
Which of these curves is the competitive firm's short-run supply curve? . Select one: a. the average total cost curve above marginal cost n b. the marginal cost curve above average variable cost C. the average variable cost curve above marginal cost O d. the average fixed cost curve
What is "Organic" funding? vered =of Jestion Select one: O a. Money for product development/marketing that comes from company's own revenues. b. Start-up funding that comes from friends, family, and fools. C. The first outside money a startup attracts. d. Funding a business from the founder's own savings. According to Michael Porter, what factors are external to the company? Select one: a. strengths and weaknesses O b. strengths and opportunities C. opportunities and threats d. threats and weaknesses All of...
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