MGNT 3125_Chapter 10_reviewquestions

MGNT 3125_Chapter 10_reviewquestions - MGNT 3125 Fall 2010...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
MGNT 3125 Fall 2010 Dr. Amine Khayati Chapter 10 Review questions 1 - The return that stockholders require on their investment in a firm is referred to as the: a- equity ratio b- cost of equity c- dividend d- weighted average cost of capital 2 - The proportional cost of equity plus the proportional after-tax cost of debt is called the: a- portfolio weight b- debt-equity ratio c- capital structure weight d- weighted average cost of capital 3 - The cost of debt is based on the: a- initial expected return of the firm’s existing debt b- current beta of the firm and the risk premium c- historical average return of the debt d- creditor’s required rate on new debt 4 - The cost of debt for a firm will decrease for: a- an increase in tax rates b- an increase in the risk premium c- a decrease in the bond rating of a firm d- an increase in the risk level of the firm 5 - Which of the following is a correct statement about the Weighted Average Cost of Capital WACC: I- The WACC uses the after-tax cost of debt
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/06/2010 for the course MGNT 3125 taught by Professor Warsi during the Spring '08 term at SPSU.

Page1 / 2

MGNT 3125_Chapter 10_reviewquestions - MGNT 3125 Fall 2010...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online