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NEW QUESTION: 1
A firm's capital structure has a debt-to-equity ratio of 0.8. The pretax cost of debt is 7%. The beta of the stock is 1.3 in an environment with risk-free rate of 5.5% and an expected market return of 16%. The firm is in the 45% tax bracket. The weighted average cost of capital of the firm equals ________.
A. 13.81%
B. 12.35%
C. 6.91%
D. 9.43%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Using CAPM, the cost of equity equals 5.5% + 1.3*(16% - 5.5%) = 19.15%. Since the debt interest is tax deductible, the after-tax cost of debt equals 7%*(1-0.45) = 3.85%. Now, the D/E ratio = 0.8. Hence, (D+E)/ E = 1.8, giving E/(D+E) = 0.556. Thus, equity forms 55.6% of the capital while debt forms 44.4%. The WACC is then equal to 0.556*19.15% + 0.444*3.85% = 12.35%.
NEW QUESTION: 2
A. Option B
B. Option C
C. Option D
D. Option A
Answer: B
NEW QUESTION: 3
Refer to the exhibit. Why is R3 unable to install 1.1.1.1/32 in its routing table?
A. The bgp redistribute-internal command is missing under the R2 BGP process.
B. 11.11.11.11/32 is advertising in the BGP table, so conditional advertising is not working.
C. 11.11.11.11/32 exists in the routing table, so the conditional advertising is not working.
D. The route is filtered out by the ip prefix-list ROUTE-IN command.
Answer: D
NEW QUESTION: 4
In which three situations does a transaction complete? (Choose three.)
A. when a ROLLBACK command is executed
B. when a PL/SQL anonymous block is executed
C. when a data definition language (DDL) statement is executed
D. when a TRUNCATE statement is executed after the pending transaction
E. when a DELETE statement is executed
Answer: A,C,D
Explanation:
References:
https://docs.oracle.com/cd/B19306_01/server.102/b14220/transact.htm