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
cost of new common equity
Related posts
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
Leave a Reply