FIN QUIZ

# FIN QUIZ - What is the after-tax cost of preferred stock...

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What is the after-tax cost of preferred stock that sells for \$10 per share and offers a \$1.20 dividend when the tax rate is 35% 7.80% 12.00% 8.33% 4.20% Question 2: (1 point) How much is added to a firm's weighted average cost of capital for 45% debt financing with a required rate of return of 10% and a tax rate of 35% 2.93%- 2 nd time 4.50% 3.50% 1.29% The company cost of capital, after tax, for a firm with a 65/35 debt/equity split, 8% cost of debt, 15% cost of equity, and a 35% tax rate would be: 7.02% 8.63% 10.80% 13.80% What is the WACC for a firm with 70% debt and 30% equity that pays 14% on its debt, 24% on its equity, and has a 44% tax rate? (Round your answer to one decimal place.) 15.1% 12.7% 11.5% 11.1% If a firm earns the WACC as an average return on its average-risk assets, then: equityholders will be satisfied, but bondholders will not.

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bondholders will be satisfied, but equityholders will not. all investors will earn their minimum required rate of return. the firm is investing only in positive NPV projects. Find the required rate of return for equity investors of a firm with a beta of 1.3 when the risk free
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