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NEW QUESTION: 1
Which of the following statements is most correct?
A. The reason that a cost of capital is assigned to retained earnings is because these funds are already earning a return in the business, the reason does not involve the opportunity cost principle.
B. All of these statements are false.
C. Suppose a firm is losing money and thus, is not paying taxes, and that this situation is expected to persist for a few years whether or not the firm uses debt financing. Thus the firm's after-tax cost of debt will equal its before-tax cost of debt.
D. The bond-yield-plus-risk-premium approach to estimating a firm's cost of common equity involves adding a subjectively determined risk-premium to the market risk-free bond rate.
E. The component cost of preferred stock is expressed as k(ps)(1 - T), because preferred stock dividends are treated as fixed charges, similar to the treatment of debt interest.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Obviously if the firm is paying no taxes, its after-tax cost of debt will equal its before-tax cost of debt.
NEW QUESTION: 2
By default, group policies are first applied to networked computers when the:
A. Computer is backed up.
B. Computer starts up.
C. User accesses a shared drive.
D. User runs gpresult.exe.
Answer: B
NEW QUESTION: 3
A. Option D
B. Option A
C. Option C
D. Option B
Answer: C