Morales Publishing's tax rate is 25%, its beta is 1.10, and it uses no debt. However, the CFO is considering moving to a capital structure with 30% debt and 70% equity. If the risk-free rate is 5.0% and the market risk premium is 6.0%, by how much would the capital structure shift change the firm's cost of equity?
A. 1.91%
B. 2.12%
C. 2.33%
D. 2.57%
E. 2.82%
Answer: B
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Which of the following conditions inspired the establishment of the Federal Sentencing Guidelines for Organizations (FSG) in 1991?
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Sanford, Inc, enters into a call option contract with Sons Investment Co on January 2, 2014 . This contract gives Sanford the option to purchase 1,000 shares of MAX stock at $100 per share. The option expires on April 30, 2014 . MAX shares are trading at $100 per share on January 2, 2014, at which time Sanford pays $400 for the call option. The $400 paid by Sanford, Inc, to Sons Investment is
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As companies have globalized, labor unions have
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Which of the following capital budgeting techniques makes the assumption that the project's cash flows are reinvested at the firms required rate of return?
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