Cost of Capital
In the pure play method, a company can calculate its own cost of capital with the help of averaging an
other company capital policy
other company beta
other company cost
other division cost
other company 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 beta which is estimated as regression slope coefficient is classified as
A. historical beta
B. market beta
C. coefficient beta
D. riskier beta
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
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