Author Question: Business risk refers to A) the variability of a firm's stock price. B) the variability of a ... (Read 123 times)

eruditmonkey@yahoo.com · **on:** Jul 10, 2018

Business risk refers to

A) the variability of a firm's stock price.
B) the variability of a firm's expected earnings before interest and taxes.
C) the risk associated with financing a firm with debt.
D) the uncertainty associated with a firm's CAPM.

Question 2

Jiffy Co expects to pay a dividend of 3.00 per share in one year. The current price of Jiffy common
stock is 60 per share. Flotation costs are 3.00 per share when Jiffy issues new stock.

What is the
cost of internal common equity (retained earnings) if the long-term growth in dividends is
projected to be 8 percent indefinitely?
A) 16 percent B) 14 percent C) 15 percent D) 13 percent