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NEW QUESTION: 1
A. Option A
B. Option C
C. Option B
D. Option D
Answer: B
NEW QUESTION: 2
The common stock of Anthony Steel has a beta of 1.20. The risk-free rate is 5 percent, and the market risk premium is 6 percent. This year's addition to retained earnings is $3,000,000. The company's capital budget is $4,000,000 and its target capital structure is 50 percent debt and 50 percent equity. What is the company's cost of equity financing?
A. 12.4%
B. 12.2%
C. 7.0%
D. 11.0%
E. 7.2%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Anthony Steel will use retained earnings to fund the equity portion of its capital budget. We can see this because the retained earnings break point is $3,000,000/0.5 = $6,000,000, which is greater than the capital budget.
The cost of equity from the CAPM (Capital Asset Pricing Model) is:
k(s) = krf) + (k(m) - k(rf))b(i) = 5% + (6%)1.2 = 12.2%.
NEW QUESTION: 3
An Unconnected Stored Procedure can run in the following fashions?(Choose all that apply) Choose 3 answers
A. As the only object In the mapping
B. As a Pre-Session SQL command
C. As a Post-Session SQL command
D. From an expression
Answer: B,C,D
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