1. Which of the following statement is correct?
a. Major risk management (RM) methods include loss control, loss financing, and internal risk reduction.
b. All the answers are incorrect.
c. Remission is a method of loss control.
d. Loss of profit is an example of a direct loss from pure risk.
e. Exchange rate risk is a type of pure risk.
2. Several years ago the Haverford Company sold a $1,000 par value bond that now has 20 years to maturity and an 7.00% annual coupon that paid quarterly. The bond currently sells for $900.64, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation?
A. 5.02% B. 5.13% C. 4.69% D. 4.91% E. 4.80%