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

Author Question: Which of the following statements is correct? (Read 5 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
Great answer, keep it coming :)

upturnedfurball

  • Member
  • Posts: 334
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Children of people with alcoholism are more inclined to drink alcohol or use hard drugs. In fact, they are 400 times more likely to use hard drugs than those who do not have a family history of alcohol addiction.

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Did you know?

The most common childhood diseases include croup, chickenpox, ear infections, flu, pneumonia, ringworm, respiratory syncytial virus, scabies, head lice, and asthma.

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?

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

The surgical nurse assists the client into the correct position The surgical nurse assists the client into the correct position
The correct statement about hormones-insulin and glucagon The correct statement about hormones-insulin and glucagon
Correct use a fire extinguisher Correct use a fire extinguisher
This modified model of Easton’s systems theory puts government decision makers as the source of pol This modified model of Easton’s systems theory puts government decision makers as the source of pol
Each of the eight injectors shown are producing a correct spray pattern for the applications. While ... Each of the eight injectors shown are producing a correct spray pattern for the applications. While ...
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
Video: Types of Burns

For a complete list of videos, visit our video library