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13. The cost of capital for a firm, 'Waco, in a tax-free environment is: 1) equal to the market value weighted average of the return
13. The cost of capital for a firm, 'Waco, in a tax-free environment is: 1) equal to the market value weighted average of the return on equity and the return on debt; I) equal to ra, the rate of return for that business risk class; III) equal to the overall rate of return required on the levered firm I and II only Il and Ill only All of the above None of the above 14. The market for corporate control includes: 1) mergers 11) Initial Public Offering (IPOs) II) spin-offs and divestitures IV) leveraged buyouts (LBOs) V) privatizations A. I only B. I, II, III and only C. I, III, IV and V only D. All of the above 15. For the case of an electric car project, which of the following costs or cash flows should be categorized as incremental when analyzing whether to invest in the project? The cost of research and development undertaken for developing the electric car during the past three years The annual depreciation charge Tax savings resulting from the depreciation charges Dividend payments
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