29. Easy Slider Inc. sold a 15 year $1,000 face value bond with a 10 percent coupon rate. Interest is paid annually. After flotation costs, Easy Slider received $928 per bond. Compute the after-tax cost of debt for these bonds if the firm's marginal tax rate is 40 percent. (Points : 3)

6.0% 7.2% 7.8% 6.6%

Question 30.30. For a company that is not planning to change its target capital structure, the proportions of debt and equity used in calculating the weighted cost of capital should be based on the current ____ weights of the individual components. (Points : 3)

book value market value replacement value accounting value

Question 31.31. The cost of capital is (Points : 3)

the rate of return required by investors in the firm's securities the minimum rate of return required on new investments of high risk undertaken by the firm approximately 10 percent for most firms concerned with plant and equipment only

Question 32.32. The CAPM assumes that the only risk of concern to the investor is ____, which is measured by ____. (Points : 3)

Unsystematic risk, beta Systematic risk, the return to the market portfolio Systematic risk, beta Unsystematic risk, the return to the market portfolio

Question 33.33. For firms subject to the 34% marginal tax rate, the after-tax cost of ____ is roughly two-thirds the cost of preferred stock. (Points : 3)

retained earnings new common stock long-term debt retained earnings and new common stock