Following is information about Sleek Pleats (SP) Corporation. The company has no preferred stock. Type of Proportion of the Type of Capital After-Tax Cost Capital Capital Structure Debt, rdT 7.0% Debt
30.0% Common equity Equity 70.0 Retained earnings, rs 14.0 New issue, re 16.0 The firm expects to retain $210,000 in earnings this year to invest in capital budgeting projects. If the SP's capital budget is expected to equal $290,000, what required rate of return, or marginal cost of capital, should be used when evaluating capital budgeting projects?
A. 11.9%
B. 13.3%
C. 10.5%
D. 11.5%
E. 12.3%
Answer: A
You might also like to view...
If a potential vendor offers what is perceived by a member of the buying center to be a better buy, the company may want to revisit the purchase decision. This type of situation is typically a:
A) straight rebuy B) modified rebuy C) new task purchase D) joint demand purchase
Which of the following tasks is not a component of research design?
A) Design the exploratory, descriptive, and/or causal phases of the research. B) Construct and pretest a questionnaire (interviewing form) or an appropriate form for data collection. C) Specify the sampling process and sample size. D) Develop hypotheses.
People with narcissistic personalities often play what type of role?
a. job role b. task role c. self-interest role d. maintenance role
On June 1, Apex Co issued a $30,000, 8%, 120-day note payable to Jones Co Assume the fiscal year of Apex Co ends June 30 . What is the amount of interest expense recognized by Apex in the current year?
a. $750.00 b. $166.67 c. $333.33 d. $200.00