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.
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## This note was uploaded on 01/18/2012 for the course FIN 254 taught by Professor Gingerwagner during the Fall '11 term at Syracuse.

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

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