This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Which of the following statements is correct? (Read 59 times)

bryantpr01

  • Full Member
  • ***
  • Posts: 166
on: Aug 7, 2023
Which of the following statements is correct?

◦

The bond-yield-plus-risk-premium approach to estimating the cost of common equity involves adding a risk premium to the interest rate on the company’s own long-term bonds. Empirical work suggests that the risk premium over a firm’s own bond yield has generally ranged from 5 to 10 percentage points, with recent values close to 5%.


◦

The WACC is calculated using a before-tax cost for debt equal to the interest rate that must be paid on new debt, along with the before-tax costs for common stock and for preferred stock if it is used.


◦

The WACC can change depending on the amount of funds a firm raises during a given year. Moreover, the WACC at each level of funds raised is a weighted average of the marginal costs of each capital component, with the weights based on the firm’s target capital structure. 


◦

A decrease in the risk-free rate is likely to increase the marginal costs of both debt and equity.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by bryantpr01 on Aug 7, 2023

koswald

  • Full Member
  • ***
  • Posts: 148
Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 39% of students answer this correctly


bryantpr01

  • Member
  • Posts: 166
Reply 2 on: Aug 7, 2023
Excellent

cpetit11

  • Member
  • Posts: 321
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

Aspirin may benefit 11 different cancers, including those of the colon, pancreas, lungs, prostate, breasts, and leukemia.

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

One way to reduce acid reflux is to lose two or three pounds. Most people lose weight in the belly area first when they increase exercise, meaning that heartburn can be reduced quickly by this method.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

If the valve clearance (lash) is not correct, loosen the retaining nut and turn the valve adjusting ... If the valve clearance (lash) is not correct, loosen the retaining nut and turn the valve adjusting ...
How to choose the correct u and dv when you integrate by parts How to choose the correct u and dv when you integrate by parts
How to convert verbal statements into algebraic equations (Part 1) How to convert verbal statements into algebraic equations (Part 1)
Using the measuring device to give the correct dose to children Using the measuring device to give the correct dose to children
Combination of arrangement and sequence is correct Combination of arrangement and sequence is correct
Directions: Fill in the correct number or word(s). Order: Lantus U-100 insulin 68 units subcut ... Directions: Fill in the correct number or word(s). Order: Lantus U-100 insulin 68 units subcut ...
Video: Nucleic acid digestion -small intestine

For a complete list of videos, visit our video library