Author Question: Which of the following causes a firm's cost of capital (WACC) to differ from an investor's required ... (Read 73 times)

gbarreiro

  • Hero Member
  • *****
  • Posts: 566
Which of the following causes a firm's cost of capital (WACC) to differ from an investor's required
  rate of return on the company's common stock?
 
  A) the fact that the risk-free rate of interest has increased
  B) The market risk premium exceeds 12.
  C) the incurrence of flotation costs when new securities are issued
  D) None of the above N the WACC and required return are the same.

Question 2

The external funds requirement results primarily from ________. (See Table 4.5)
 
  A) the payment of dividends
  B) the retirement of debt and purchase of new fixed assets
  C) low profit margin
  D) high cost of sales


diana chang

  • Sr. Member
  • ****
  • Posts: 288
Answer to Question 1

C

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

The horizontal fraction bar was introduced by the Arabs.

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

For a complete list of videos, visit our video library