Author Question: The weighted average of a firm's expected return on its stock and the interest rate that it pays for ... (Read 40 times)

plus1 · **on:** Jul 1, 2018

The weighted average of a firm's expected return on its stock and the interest rate that it pays for debt is known as the:

A) internal rate of return.
B) opportunity cost of capital.
C) risk-free rate of return.
D) company cost of capital.

Question 2

The beta for General Motors (GM) is 0.5, the risk-free rate is 4, and the market return is 9. What is GM's risk-adjusted discount rate?

A) 4
B) 4.5
C) 6.5
D) 9