A firm has a market value of equity of $30,000. It borrows $7500 at 8%. If the unlevered cost of equity is 15%, what is the firm's cost of equity capital?
A) 16.75%
B) 6.70%
C) 20.10%
D) 23.45%
Answer: A
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An above-the-line deduction reduces both adjusted gross income and taxable income.
Answer the following statement true (T) or false (F)
Regarding the tax treatment of payments to securities holders, it is true that ________
A) interest and preferred stock dividends are not tax-deductible, while common stock dividends are tax deductible B) interest and preferred stock dividends are tax-deductible, while common stock dividends are not tax-deductible C) common stock dividends and preferred stock dividends are tax-deductible, while interest is not tax-deductible D) common stock dividends and preferred stock dividends are not tax-deductible, while interest is tax-deductible
When a dispute brought in a state court involves incidents that occurred in more than one state, what problem may arise?
a. an Erie Railroad v. Tompkins issue of federal versus state common law b. a real and substantial party problem c. a quasi-in-rem problem d. a conflict-of-law problem e. all of the other choices are correct
Under the TILA, a qualified mortgage (QM)
A. limits upfront points and fees to 5 percent. B. limits all of a borrower's debt to 43 percent of his or her income. C. allows balloon payments only if the borrower agrees up front. D. must allow for negative amortization.