Cost of Capital

Cost of Capital
The cost of equity which is raised by reinvesting earnings internally must be higher than the
cost of initial offering
cost of new common equity
cost of preferred equity
cost of floatation
Author: rikazzz Comment
Cost of Capital
An attempt to make correction by adjusting historical beta to make it closer to an average beta is classified as
adjusted stock
adjusted beta
adjusted coefficient
adjusted risk
Author: rikazzz Comment
Cost of Capital
The method in which company finds other companies considered in same line of business to evaluate divisions is classified as
pure play method
same play method
division line method
single product method
Author: rikazzz Comment
Cost of Capital
If the future return on common stock is 19% and the rate on T-bonds is 11% then the current market risk premium will be
30
0.3
0.08
8
Author: rikazzz Comment
Cost of Capital
During the planning period, a marginal cost for raising a new debt is classified as
debt cost
relevant cost
borrowing cost
embedded cost
Author: rikazzz Comment
Cost of Capital
In retention growth model, the percent of net income firms usually pay out as shareholders dividends, is classified as
payout ratio
payback ratio
growth retention ratio
present value of ratio
Author: rikazzz Comment
Cost of Capital
The historical growth rates, analysis forecasts and retention growth model are the approaches to estimate
present value of gain
growth rate
growth gain
discounted gain
Author: rikazzz Comment
Cost of Capital
The beta which is estimated as regression slope coefficient is classified as
historical beta
market beta
coefficient beta
riskier beta
Author: rikazzz Comment
Cost of Capital
The stock selling price is $35, expected dividend is $5 and expected growth rate is 8% then cost of common stock would be
40
0.2229
0.1428
80
Author: rikazzz Comment
Cost of Capital
An interest rate which is paid by the firm as soon as it issues the debt is classified as pre-tax
term structure
market premium
risk premium
cost of debt
Author: rikazzz Comment

Go to Page