A company has after-tax earnings of $39,400 for the year. The firm adheres to a residual dividend policy with a debt-equity ratio of 0.7. The firm needs $56,300 for new investments. What is the amount of the total dividends that will be paid?______

$6,282.35

$13,906.18

$16,218.00

$21,704.04

A company purchased $25,000 worth of inventory. The terms of sale were 2/5, net 45. What's the implicit interest if a buyer does not take the cash discount? _____

$250

$300

$500

$800

Based on the information from ABOVE, what's the effective annual rate (EAR) if the buyer does not take the cash discount?_____

10.12%.

18.36%.

10.12%.

20.24%

Ross Inc. has issued a bond. The bond has a 12% coupon, paid semiannually, a current maturity of 20 years, and sell for $1,171.59. The firm's marginal tax rate is 40%. What's the firm's after-tax component cost of debt?

5.0%

6.0%

7.0%

12%

Ross's preferred stock currently sells for $90 per share and pays a dividend of $10 per share. However, the firm will only receive $80 per share from the sale of new preferred stock due to the floatation costs. What's the firm's component cost of Preferred stock?

9.5%

10.0%

12.5%

13.6%

Ross's common stock currently sells for $40 per share. The firm recently paid a dividend of $2 per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 10% per year. What's the firm's cost of common stock using DCF approach?

9.5%

10.0%

15.5%

16.5%

Ross's beta is 2.2. The risk-free rate is 5%, and the expected market return is 10%. What's the firm's cost of common stock using CAPM approach?

		5.0%
		10.0%
		15.0%
		16.0%