1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
IgorLugansk [536]
2 years ago
11

This section consists of NINE (18) multiple-choice questions. Each question is worth one (1) mark. Read the below case study and

indicate which of the answer options provided is the correct answer. From question 10 – 13, all bonds are considered to have a face value of R1 000.00
1. Some projects that a firm accepts will undoubtedly result in zero or negative returns. In light of this fact, it is best if the firm

A. adjusts its hurdle rate (i.e., cost of capital) upward to compensate for this fact.
B. adjusts its hurdle rate (i.e., cost of capital) downward to compensate for this fact.
C. does not adjust its hurdle rate up or down regardless of this fact.
D. raises its prices to compensate for this fact.

2. The STAR Company relies on preferred stock, bonds, and common stock for its long-term financing. Rank in ascending order (i.e., 1 = lowest, while 3 = highest) the likely after-tax component costs of the STAR Company’s long-term financing.

A. 1 = bonds; 2 = common stock; 3 = preferred stock
B. 1 = bonds; 2 = preferred stock; 3 = common stock
C. 1 = common stock; 2 = preferred stock; 3 = bonds
D. 1 = preferred stock; 2 = common stock; 3 = bonds.

3. Pep Stores, Inc.'s R100 par value preferred stock just paid its R10 per share annual dividend. The preferred stock has a current market price of R96 a share. The firm's marginal tax rate (combined federal and state) is 40 %, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Pep Stores, Inc would be closest to

A. 6 %
B. 6.25 %
C. 10 %
D. 10.4 %.


4. The greater the beta, the of the security involved.

A. greater the unavoidable risk
B. greater the avoidable risk
C. less the unavoidable risk
D. less the avoidable risk.
5. Plaid Pants, Inc. common stock has a beta of 0.90, while Acme Dynamite Company common stock has a beta of 1.80. The expected return on the market is 10 percent, and the risk-free rate is 6 percent. According to the capital-asset pricing model (CAPM) and making use of the information above, the required return on Plaid Pants' common stock should be , and the required return on Acme's common stock should be .

A. 3.6 % ; 7.2 %
B. 9.6 % ; 13.2 %
C. 9.0 % ; 18.0 %
D. 14.0 % ; 23.0 %.

6. Espinosa Coffee & Trading, Inc.'s common stock measured beta is calculated to be 0.75. The market beta is, of course, 1.00 and the beta of the industry of which the company is a part is 1.10. If Merrill Lych were to calculate an "adjusted beta" for Espinosa's common stock, that adjusted beta would most likely be .

A. less than 0.75
B. more than 0.75, but less than 1.10
C. equal to 1.10
D. equal to 0.95 {i.e., (1/3) x (0.75 + 1.00 + 1.10)}.

7. The time preference for money is generally expressed by …….

A. interest rate
B. discount rate
C. compound rate
D. D future value.

8. Interest rate covers….

A. Risk-free rate
B. Risk premium
C. Risk-free rate + Risk premium
D. inflation rate.

9. A firm has issued bonds at 13.5%, and the firm is subject to a tax rate of 30%. The after-tax cost of debt is equal to …

A. 3,11%
B. 5,75%
C. 9,45%
D. 11,05%
E. 14,92%.

10. Merton Enterprises has bonds on the market making annual payments, with 14 years to maturity, and selling for R870. At this price, the bonds yield 6,8 per cent. What must the coupon rate be on Merton's bonds?

A. R53.31 ; 5.33%
B. R48.60 ; 4.86%
C. R68.00 ; 6.80%
D. R87.00 ; 8.70%.

11. Jane's Pizzeria issued 11-year bonds two years ago at a coupon rate of 8,2 per cent. The bonds make semi-annual payments. If the YTM on these bonds is 7,4 per cent, what is the current bond price?

A. R1 000. 00
B. R1 074. 62
C. R1 051. 89
D. R1 082.00.

12. Angelo's Spaghetti Factory issued 12-year bonds four years ago at a coupon rate of 8,6 per cent. The bonds make semi-annual payments. If these bonds currently sell for 95 per cent of par value, what is their YTM?

A. 9.50%
B. 8.60%
C. 9.70%
D. 17%.


13. Dumisani & Company has bonds on the market with 14,5 years to maturity, a YTM of 7,5 per cent, and a current price of R1145. The bonds make semi-annual payments. What must the coupon rate be on Dumisani's bonds?

A. 7.50%
B. 11.45%
C. 14.50%
D. 10.17%.

14. Makin' Copies Company will pay a R3,15 per share dividend next year. The company pledges to increase its dividend by 4,5 per cent per year indefinitely. If you require a 10 percent return on your investment, how much will you pay for the company's shares today?

A. R57.27
B. R78.00
C. R125.00
D. R45.65.

15. Suppose you know that a company's shares currently sell for R54 per share and the required return on the shares is 12 per cent. You also know that the total return on the shares is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?

A. R4.64
B. R6.24
C. R5.40
D. R3.06.

1
SAT
1 answer:
devlian [24]2 years ago
3 0

In light of this fact, it is best if the firm adjusts its hurdle rate (i.e., cost of capital) upward to compensate for this fact.

<h3>What is hurdle rate?</h3>

A hurdle rate is known to be the lowest  rate of return that is needed on a project or any kind of investment.

Note that Some projects do take an undoubtedly result in zero and as such,  In light of this fact, it is best if the firm adjusts its hurdle rate (i.e., cost of capital) upward to compensate for this fact.

Learn more about hurdle rate  from

brainly.com/question/14285844

#SPJ1

You might be interested in
Which of the following did Kant determine is essential for ethics
Talja [164]

The thing which Kant determined was essential for ethics is to be truthful and to do unto others as you would have them do unto you.

<h3>What is Ethics?</h3>

This refers to the set of values that are used to guide a person in doing the right thing in any given circumstance.

Hence, we can see that Immanuel Kant, a philosopher was of the opinion that for ethics to thrive, then people must always be truthful and also to follow the golden rule.

Read more about ethics here:

brainly.com/question/13383200

#SPJ1

7 0
2 years ago
An intoxicated client was admitted for trauma treatment last night at 2:00 AM (0200). When should the nurse expect to be alert f
Ilia_Sergeevich [38]

The nurse should expect to be alert for withdrawal symptoms between 8:00 and 10:00 AM (0800 and 1000) today (6 to 8 hours after drinking stopped); option E.

<em>Note that the complete question is found below:</em>

<em>An intoxicated client was admitted for trauma treatment last night at 2:00 AM (0200). When should the nurse expect to be alert for withdrawal symptoms?</em>

<em>-about 2:00 AM (0200) tomorrow (24 hours after drinking stopped)</em>

<em>-about 2:00 AM (0200) of hospital day 3 (72 hours after drinking stopped)</em>

<em>-between 8:00 and 10:00 AM (0800 and 1000) today (6 to 8 hours after drinking stopped)</em>

<em>-about 2:00 AM (0200) of hospital day 2 (48 hours after drinking stopped)</em>

<em>-between 8:00 and 10:00 AM (0800 and 1000) today (6 to 8 hours after drinking stopped)</em>

<h3>What are withdrawal symptoms?</h3>

Withdrawal symptoms are those symptoms which are observed in individuals who are addicted to substances show when they suddenly stop using those substances.

Withdrawal symptoms are observed in drug users and alcoholics.

Withdrawal symptoms are seen in alcoholics 6 to 8 hours after drinking stopped.

In conclusion, withdrawal symptoms affect substance abusers.

Learn more about withdrawal symptoms at: brainly.com/question/19369341

#SPJ1

5 0
2 years ago
Access to this page has been denied because we believe you are using automation tools to browse the website.
earnstyle [38]

Considering the statement described above, this is a common error attributed to the user's browser.

This type of error is often attributed to two major causes, which are:

  • Javascript is disabled or blocked by an extension. This is usually a result of ad blockers on your browser.

  • Your browser does not support cookies.

To bypass such errors and access the website, ensure that Javascript and cookies are enabled on your browser and that you are not blocking them from loading before accessing the website.

Hence, in this case, it is concluded that this is a common error.

Learn more about Javascript here: brainly.com/question/16698901

8 0
2 years ago
Let see if you know long division 3) 461​
WARRIOR [948]

Answer:

461 = dividend

3 = divisor

Explanation:

Step 1:

Start by setting it up with the divisor 3 on the left side and the dividend 461 on the right side like this:

           

   3 ⟌ 4 6 1

Step 2:

The divisor (3) goes into the first digit of the dividend (4), 1 time(s). Therefore, put 1 on top:

       1    

   3 ⟌ 4 6 1

Step 3:

Multiply the divisor by the result in the previous step (3 x 1 = 3) and write that answer below the dividend.

       1    

   3 ⟌ 4 6 1

      3    

Step 4:

Subtract the result in the previous step from the first digit of the dividend (4 - 3 = 1) and write the answer below.

       1    

   3 ⟌ 4 6 1

     - 3    

       1    

Step 5:

Move down the 2nd digit of the dividend (6) like this:

       1    

   3 ⟌ 4 6 1

     - 3    

       1 6  

Step 6:

The divisor (3) goes into the bottom number (16), 5 time(s). Therefore, put 5 on top:

       1 5  

   3 ⟌ 4 6 1

     - 3    

       1 6  

Step 7:

Multiply the divisor by the result in the previous step (3 x 5 = 15) and write that answer at the bottom:

       1 5  

   3 ⟌ 4 6 1

     - 3    

       1 6  

       1 5  

Step 8:

Subtract the result in the previous step from the number written above it. (16 - 15 = 1) and write the answer at the bottom.

       1 5  

   3 ⟌ 4 6 1

     - 3    

       1 6  

     - 1 5  

         1  

Step 9:

Move down the last digit of the dividend (1) like this:

       1 5  

   3 ⟌ 4 6 1

     - 3    

       1 6  

     - 1 5  

         1 1

Step 10:

The divisor (3) goes into the bottom number (11), 3 time(s). Therefore put 3 on top:

       1 5 3

   3 ⟌ 4 6 1

     - 3    

       1 6  

     - 1 5  

         1 1

Step 11:

Multiply the divisor by the result in the previous step (3 x 3 = 9) and write the answer at the bottom:

       1 5 3

   3 ⟌ 4 6 1

     - 3    

       1 6  

     - 1 5  

         1 1

           9

Step 12:

Subtract the result in the previous step from the number written above it. (11 - 9 = 2) and write the answer at the bottom.

       1 5 3

   3 ⟌ 4 6 1

     - 3    

       1 6  

     - 1 5  

         1 1

     -     9

           2

You are done, because there are no more digits to move down from the dividend.

The answer is the top number and the remainder is the bottom number.

Therefore, the answer to 461 divided by 3 calculated using Long Division is:

153

2 Remainder

8 0
3 years ago
SOME ONE HELP WITH THIS 5 QUESTIONS !!!!!!!!!!!! Packet economics
Solnce55 [7]
I don't know if I'm right but I think is:

1- D
2-A
3-C
4-A
3 0
3 years ago
Read 2 more answers
Other questions:
  • Which statement best describes why North Korea punishes political deviants? *from the article total control in north korea
    10·1 answer
  • Describe the value of education
    12·1 answer
  • If you are charged in a crash with injuries and are driving a motorcycle, you are _______________ for any bodily injuries and pr
    15·1 answer
  • X^2-9 The expression above is equivalent to which of the following?
    11·1 answer
  • What is the function of a prepositional phrase?
    15·2 answers
  • What does stanza 7 reveal?
    15·2 answers
  • Determine the slope of the line given two points (-2 4) and (1 6)
    5·1 answer
  • Write an equation of the line that is parallel to the line whose equation is 3y+7=2x.
    7·1 answer
  • A solid with one rectangular face and 4 triangular faces is.
    6·1 answer
  • If you dig a siz foot hole how deep is it?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!