Cost of Capital
The beta which is estimated as regression slope coefficient is classified as
historical beta
market beta
coefficient beta
riskier beta
historical beta
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The cost of common stock is 16% and the bond yield is 9% then the bond risk premium would beA. 0.07
B. 7
C. 0.0178
D. 0.25
In weighted average cost of capital, the capital components are the funds that are usually offered by
A. stock market
B. investors
C. capitalist
D. exchange index
The interest rate is 12% and the tax savings (1-0.40) then the after-tax component cost of debt will be
A. 0.072
B. 7.2 times
C. 17.14 times
D. 17.14
An interest rate which is paid by the firm as soon as it issues the debt is classified as pre-tax
A. term structure
B. market premium
C. risk premium
D. cost of debt
The stock selling price is $35, expected dividend is $5 and expected growth rate is 8% then cost of common stock would be
A. 40
B. 0.2229
C. 0.1428
D. 80
The historical growth rates, analysis forecasts and retention growth model are the approaches to estimate
A. present value of gain
B. growth rate
C. growth gain
D. discounted gain
In retention growth model, the percent of net income firms usually pay out as shareholders dividends, is classified as
A. payout ratio
B. payback ratio
C. growth retention ratio
D. present value of ratio
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