Which of the following descriptions of the component costs of capital is INCORRECT?
A) The cost of preferred shares, Kp, is estimated as the current dividend yield on any existing preferred shares or shares of similar firms.
B) The cost of debt, Kd, is estimated as the after-tax cost of issuing new debt (such as bonds) today.
C) The cost of debt is estimated using the CAPM as the risk-free rate or long-term government bond yield plus beta times a market risk premium.
D) All of the above are correct.
C
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A) lie if it is in the best interest of the client B) write a tell-all book revealing why your CEO lied C) do what is legal, even if it is not ethical D) never lie
What is the name of the meeting where the attorneys meet with the judge prior to trial and try to reach a compromise?
a. Status conference b. Settlement conference c. Motion hearing d. Trial-setting conference
Pettit Company purchased heavy equipment by giving the seller a $30,000 cash down payment and a 5-year interest-bearing note for the $170,000 balance of the price. Compute Pettit's book basis and tax basis in the equipment.
A. Book basis $200,000; tax basis $30,000 B. Book and tax basis $200,000 C. Book and tax basis $30,000 D. Book basis $30,000; tax basis $170,000
Samuel's boss makes no managerial decisions but asks his employees to take the necessary steps in all aspects of work. Samuel's boss follows a(n) ________ decision-making style.
A. autocratic B. laissez-faire C. directive D. democratic E. participative