During the planning period, a marginal cost for raising a new debt is classified as:

Select one:

A. Debt Costs

B. Marginal Costs

C. Amortized Costs

D. Borrowed Costs

E. Relevant Costs

The Dividend will grow at a non-constant rate for N periods and the periods such as N is classified as:

Select one:

A. Horizon/intrinsic Date

B. Terminal date and Horizon/intrinsic Date

C. Terminal Date

D. Growth Date

E. None of the Above

According to, Moody's corporate bond rating for a bond is Caa1 but S&P and Fitch rated that corporate bond as CCC+, CCC respectively. How do you defined that corporate bond?

Select one:

A. Default

B. In poor Standing

C. Speculative

D. Substantial Risk

E. Extremely Speculative

Duchess Corporation wishes to determine its cost of common stock equity. The market price of its common stock is $60 per share. The firm expects to pay a dividend, D1, of $3 with growth rate constantly at 4%. Calculate the cost of equity?

Select one:

A. No answer

B. 13%

C. 9%

D. 19%

Since there is no promised dividend, the equity which is valued by discounting the dividend stream that the firm is expected to pay to its shareholders using the required or expected rate of return. Which equity it is?

Select one:

A. WACC

B. Debt Equity

C. Preferred Equity

D. None of the above

E. Common Equity

What will be the YTM on a debt that has par value of $1,000, a coupon interest rate of 6%, time to maturity of 7 years and is currently trading at $900? What will be the cost of debt if the tax rate is 25%?

Select one:

A. Kd (5.56%), KdAT (4.42%)

B. Kd (6.32%), KdAT (4.42%)

C. No Answer

D. Kd (6.32%), KdAT (3.32%)

E. Kd (6.32%), KdAT (4.19%)

The first step in calculating the value of stock with non-constant growth is to estimate expected dividend. What is the second step top find out mainly:

Select one:

A. Actual Intrinsic Stock

B. Expected Intrinsic Stock

C. Expected Price of Stock

D. Actual Expected Dividend

E. Estimated Number of share

Standard and Poor's bond rating agency reduces your firm's bond rating from AA+ to AA. The likely effect on your firm's bonds will be:

Select one:

A. Investors will prefer your company's shares

B. Investors will not hold them

C. The price will rise

D. The price will fall

E. Your firm will find new bond issues impossible

I HAVE 20 MINUTE