1. An aspect of short-term financial planning is forecasting operating cash flow and ultimately the profitability of the company in the coming period. This type of financial planning typically uses forecasted ________.
A) income statements B) statements of cash flow C) balance sheets D) All of these
2. Calculating the weighted average cost of capital (WACC): If Metro Company has the following features, what is its WACC?
A target capital structure of 65 percent common stock.
A target of 35 percent debt.
Cost of equity is 14 percent.
Cost of debt is 6 percent.
The tax rate is 35 percent.