Which item below is not a guideline for effective ...

[P68T]

Which item below is not a guideline for effective diversification? Diversify
 
  A)
 
  among tangibles and intangibles.
  B)
 
  among assets and liabilities.
  C)
 
  on a global basis.
  D)
 
  within asset groups.

Question 2

Arrow Corp. has a WACC of 8.78, a before-tax cost of debt of 6, and a tax rate of 40. If the firm is financed 30 with debt and the balance with equity, what is the cost of equity?
 
  A) 10.50
  B) 11.00
  C) 11.50
  D) 12.00

[Carliemb17]

Answer to Question 1

B

Answer to Question 2

B
Explanation: B) Ke = (WACC - wdKd(1-t))/We = (8.78 - .30  6  (1-.40 )/.7 = 11.0.

[P68T]

TYSM

[Hdosisshsbshs]

Gracias!