Cost of Capital

Cost of Capital
A type of beta which incorporates about company such as changes in capital structure is classified as
industry beta
market beta
subtracted beta
fundamental beta
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Cost of Capital
The cost of new debt or marginal debt is also classified as
historical rate
embedded rate
marginal rate
Both A and B
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Cost of Capital
The cost of capital is equal to required return rate on equity in the case if investors are only
valuation manager
common stockholders
asset seller
equity dealer
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Cost of Capital
A formula of after-tax component cost of debt is
interest rate-tax savings
marginal tax-required return
interest rate + tax savings
borrowing cost + embedded cost
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Cost of Capital
The premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called
current risk premium
past risk premium
beta premium
expected premium
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Cost of Capital
The forecast by analysts, retention growth model and historical growth rates are the methods used for an
estimate future growth
estimate option future value
estimate option present value
estimate growth ratio
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Cost of Capital
The bond yield is 12% and the bond risk premium is 4.5% then the cost of common stock would be
0.375
0.075
0.155
2.67 times
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Cost of Capital
The type of cost which is used to raise common equity by reinvesting internal earnings is classified as
cost of mortgage
cost of common equity
cost of stocks
cost of reserve assets
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Cost of Capital
The interest rates, tax rates and market risk premium are the factors which an/a
industry cannot control
industry cannot control
firm must control
firm cannot control
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Cost of Capital
The dividend per share is $15 and sell it for $120 and floatation cost is $3.0 then the component cost of preferred stock will be
12.82 times
0.1282 times
0.1282
12.82
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