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A firm's target proportions of debt, preferred and common stock are 40%, 30%, and 30% respectively.
The after-tax return on debt is 8%, the return on preferred stock is 13% and the return on common stock is
1 5%. What is the firm's weighted average cost of capital?
A. 12.6%
B. 13%
C. 11.6%
Answer: C
Explanation:
The WACC is 0.40(8) + 0.30(13) + 0.30(15) = 11.6%.
NEW QUESTION: 2
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A. In a JUnit test using Spring support (with @ContextConfiguration annotation), it is necessary to close the ApplicationContext manually
B. The ApplicationContext eagerly instantiates all singleton beans by default
C. There are many different implementation classes which all implement the ApplicationContext interface
D. When available, the close() method will cause any registered bean destruction code to be invoked
Answer: A
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A)
B)
C)
D)
A. Option C
B. Option D
C. Option B
D. Option A
Answer: C
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B. The Net Present Value is Zero.
C. The Net Present Value is not known.
D. The DCF Rate is Zero.
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