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NEW QUESTION: 1



A. Option A
B. Option B
Answer: A

NEW QUESTION: 2
You have configured a custom field in the Employment Information portlet of the Succession Data Model as follows.

You edit the Employment Information portlet of an existing employee file and the 'Remote Worker'?
field only displays No Selection in the drop down list.
What is the most likely issue?
Please choose the correct answer.
Response:
A. The field datatype is incorrect
B. The RBP permissions are incorrect
C. The field visibility attribute is incorrect
D. The picklist ID is incorrect
Answer: D

NEW QUESTION: 3
The management of Clay Industries have adhered to the following capital structure: 40% debt, 45% common equity, and 15% perpetual preferred equity. The following information applies to the firm:
Yield to maturity of outstanding long-term debt = 9.5%
Expected return on the market = 14.5%
Annual risk-free rate of return = 6.25%
Historical Beta coefficient of Clay Industries Common Stock = 1.24 Annual preferred dividend = $1.75 Preferred stock net offering price = $28.50 Combined state/federal corporate tax rate = 35%
Given this information, and using the Capital Asset Pricing Model to calculate the component cost of common equity, what is the Weighted Average Cost of Capital for Clay Industries?
A. 8.54%
B. 10.00%
C. 14.45%
D. The WACC for Clay Industries cannot be determined from the information provided.
E. 12.14%
F. 10.81%
Answer: F
Explanation:
Explanation/Reference:
Explanation:
The calculation of the Weighted Average Cost of Capital is as follows: {fraction of debt * [yield to maturity on outstanding long-term debt][1-combined state/federal income tax rate]} + {fraction of preferred stock *
[annual dividend/net offering price]} + {fraction of common stock * cost of equity}. The cost of common equity can be calculated using three methods, the Capital Asset Pricing Model (CAPM), the Dividend- Yield-plus-Growth-Rate (or Discounted Cash Flow) approach, and the Bond- Yield-plus-Risk-Premium approach. In this example, you are required to calculate the cost of equity using the Capital Asset Pricing Model (CAPM), which is illustrated as follows: {risk-free rate + beta(expected return on the market - risk- free rate)}. Using this model, the cost of common equity can be found as 16.48%. The cost of perpetual preferred stock can be found by dividing the annual dividend by the net offering price, which is illustrated in this case as follows: {$1.75/28.50) = 6.14%. The after-tax cost of debt can be found by taking the yield to maturity on the firm's outstanding long- term debt (9.5%), and multiplying this figure by (1 - annual tax rate
35%) = 6.175%. Incorporating all of these figures into the WACC equation gives a Weighted Average Cost of Capital of 10.807%


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