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Final Exam – ConceptsCovers Chapters 9, 10, 11, 14, 15, and 2120 multiple choice concept questions.Time limit: 1.5 hours.Due by Sunday at 11:59 p.m. ET.Attempt HistoryAttemptTimeScoreLATESTAttempt 147 minutes95 out of 100Score for this quiz: 95out of 100Submitted Jun 27 at 2:59pmThis attempt took 47 minutes.Question 15 / 5 ptsSchalheim Sisters Inc. has always paid out all of its earnings as dividends; hence, the firm has no retained earnings. This same situation is expected to persist in the future. The company uses the CAPM to calculate its cost of equity, and its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would reduce its WACC? Correct!The market risk premium declinesThe flotation costs associated with issuing new common stock increaseThe company’s beta increasesExpected inflation increases
The flotation costs associated with issuing preferred stock increaseQuestion 25 / 5 ptsWhich of the following statements is correct? Correct!If a company’s beta increases, this will increase the cost of equity used to Question 35 / 5 ptsWhich of the following statements is correct?