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NEW QUESTION: 1
A firm's capital structure has a debt-to-equity ratio of 1.2. The pretax cost of debt is 6.8% and the weighted average cost of capital of the firm equals 9.8%. The risk-free rate in the economy is 6.2% the expected rate of return on the market is 14%. The firm must pay 35% of its gross income in taxes. The beta of the stock equals ________.
A. 0.91
B. 1.02
C. 1.64
D. 1.3
Answer: D
Explanation:
Explanation/Reference:
Explanation:
Since the debt interest is tax deductible, the after-tax cost of debt equals 6.8%*(1-0.35) = 4.42%. Since the D/E ratio = 1.2, (D+E)/E = 2.2, giving E/(D+E) = 0.455. Thus, equity forms 45.5% of the capital whiledebt forms 54.5%. The WACC is then equal to 0.455*RE + 0.545*4.42% = 9.8% (given). Solving gives RE
16.24%. If B is the beta of the stock, then using CAPM, 16.24% = 6.2% + B*(14% - 6.2%), giving B = 1.29.
NEW QUESTION: 2
Refer to the exhibit.
The company uses EIGRP as the routing protocol. What path will packets take from a host on the 192.168.10.192/26 network to a host on the LAN attached to router R1?
A. The path of the packets will be R3 to R2 to R1.
B. The path of the packets will be both R3 to R2 to R1 AND R3 to R1.
C. The path of the packets will be R3 to R1 to R2.
D. The path of the packets will be R3 to R1.
Answer: D
Explanation:
Host on the LAN attached to router R1 belongs to 192.168.10.64/26 subnet. From the output of the routing table of R3 we learn this network can be reach via 192.168.10.9, which is an IP address in 192.168.10.8/30 network (the network between R1 & R3) -> packets destined for
192.168.10.64 will be routed from R3 -> R1 -> LAN on R1.
NEW QUESTION: 3
Given the code fragment:
Which code fragment, when inserted at line 9, enables the code to print true?
A. String str2 = str1;
B. String str2 = new String (str1);
C. String str2 = "Duke";
D. String str2 = sb1. toString ();
Answer: D
NEW QUESTION: 4
Hub (hub) interface type ().
A. MDI_S
B. MDI_X
C. MDI_R
D. MDI
Answer: B