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solmaris [256]
3 years ago
12

Which of the following statements is MOST correct?A. Because the cost of debt is lower than the cost of equity, value-maximizing

firms maintain debt ratios of close to 100%.B. Corporations that are 100% equity financed will have a much lower weighted average cost of capital because the lack of debt lowers their risk of bankruptcy.C. The source of capital with the lowest after-tax cost is preferred stock, because it is a hybrid security, part debt and part equity.D. The cost of a particular source of capital is equal to the investor's required rate of return after adjusting for the effects of both flotation costs and corporate taxes.
Business
1 answer:
Mama L [17]3 years ago
5 0

Answer:

B. Corporations that are 100% equity financed will have a much lower weighted average cost of capital because the lack of debt lowers their risk of bankruptcy.

Explanation:

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Answer:

The correct answer is letter "D": improves efficiency, increases output, and provides for growth.

Explanation:

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<em>While talking about production, capital allows firms to hire qualified personnel that improves the company's efficiency which is likely to increase production or improve the quality of the output. Eventually, both an increase in efficiency and output contributes to the growth of an institution in the form of more profits.</em>

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Ray has six hours before he goes to bed on a school night. He plans to spend an hour surfing the Internet, two hours playing his
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3 years ago
The Allied Corporation analyzes a project that requires an immediate investment of $440. Allied estimates that at the end of the
olga_2 [115]

Answer:

NPV = $100.4002 rounded off to $100.40

Explanation:

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  • r represents the discount rate

NPV = 660 / (1+0.075)  +  [ -85 / (1+0.075)^2]  -  440

NPV = $100.4002 rounded off to $100.40

8 0
2 years ago
A $25,000 bank loan is to be repaid in equal yearly payment over 15 years at an effective annual interest rate of 7%. you did th
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Free_Kalibri [48]
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