1.The estimated of the markets overall return expectation for a company is

a. return on common equity.

b. cost of common equity

c. weighted average cost of capital

d. capital asset pricing model

2.The yield on any short-term investment instrument is a function of the maturity or holding period, the amount paid and:

a. The cash flows received

b. The money market yield

c. The after-tax yield

d. The issuing price

3.A company with a capital structure of 40 percent debt and 60 percent equity wants to calculate its weighted average cost of capital (WACC). The companys cost of debt is 5 percent and its cost of equity is 12 percent, while its marginal tax rate is 21 percent. What is its WACC?

a. 8.75 percent b. 9.20 percent c. 7.27 percent d. 8.78 percent

4.A $100,000 treasury bill that matures in 270 days is currently selling at 3 percent discount. What is the bond equivalent yield on this security?

A. 2.30 percent. B. 3.07 percent. C. 3.11 percent D 3.00 percent