What appears to be targeted equity ratio of a firm that issues $40 million in bonds and $120 million in equity to finance its new capital projects?
A. 25% B. 75% C. 50% D. 100%
The company cost of capital for a firm with a 60/40 debt/equity split, 6% cost of debt, 12% cost of equity, and a 35% tax rate would be?
A. 8.4% B. 8.4% C. 10.45% D. 3.6%
The weighted-average cost of capital, after tax, for a firm with a 60/40 debt/equity split, 6% cost of debt, 12% cost of equity, and a 35% tax rate would be?
A. 2.5% B. 10.8% C. 4.2% D. 7.14%
A proposed investment must earn at least as much as the ___ if it is deemed acceptable?
A. company cost of capital B. risk free rate C. market risk premium D. Project cost of capital.