Author Question: Comparing a credit card with a debit card indicates that A) they are identical except that ... (Read 130 times)

captainjonesify

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Comparing a credit card with a debit card indicates that
 
  A)
 
  they are identical except that debt card can be used in more places.
  B)
 
  they are identical except some lenders prefer the name debit card over credit card.
  C)
 
  debit cards charge higher rates of interest.
  D)
 
  consumer protection with a credit card is stronger than it is with a debit card.

Question 2

Big City Lumber Inc. has a levered beta of 1.70, a debt-equity ratio of 0.40, and a tax rate of 25. What is the value of the firm's unlevered beta?
 
  A) 0.78
  B) 1.00
  C) 1.31
  D) 1.70



ms_sulzle

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Answer to Question 1

D

Answer to Question 2

C
Explanation: C) U = L / (1 + (D/E) (1-t)) = 1.70/(1 + .40(1-.25)) = 1.31.



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