SIROM Scientific Solutions has $5 million of outstanding equity and $5 million of bank debt. The bank debt costs 4% per year. The estimated equity beta is 2

If the market risk premium is 8% and the risk-free rate is 4%, compute the weighted average cost of capital if the firm's tax rate is 35%.
A) 11.87%
B) 12.43%
C) 11.30%
D) 13.00%


Answer: C

Business

You might also like to view...

____ is a technique used to help groups generate multiple ideas and alternatives for solving problems.

A. Groupthink B. Big Data C. MBO D. Brainstorming E. Framing

Business

Which of the following correctly states the role of banks in import/export transactions involving a letter of credit (L/C)?

A) The importer's bank is the advising and/or confirming bank; the exporter's bank is the issuing bank. B) The exporter's bank is the advising and/or confirming bank; the importer's bank is the issuing bank. C) The exporter's bank is the advising, confirming, and issuing bank. D) The importer's bank is the advising, confirming, and issuing bank. E) none of the above

Business

The branch of accounting that is most concerned with addressing the needs of specific departments of the firm is ____________________ accounting

Fill in the blank(s) with correct word

Business

When using a computer projector:

a. try it out as soon as the screen is set up b. wait till the presentation to turn it on—so the bulb doesn't burn out c. turn it off and on during the presentation to save the bulb d. none of the above

Business