Is an implied equity risk premium superior to a historic equity risk premium?

Question 1 options:

	a) No, the historic equity risk premium gives more consistent results.
	b) No, both give the same result.
	c) Yes, as it is forward looking.
	d) None of the above.

Equity Valuation students:

Question 2 options:

	a) Must calculate the equity risk premium using a historic 10 year period.
	b) Can obtain the implied equity risk premium from Damodaran's web site.
	c) None of the above.

The effective tax rate is?

Question 3 options:

	a) Income tax expense divided by earnings before tax.
	b) Income tax expense multiplied by earnings before tax.
	c) The statutory rate charged by the government.
	d) None of the above.

What is the tax rate used to calculate the after-tax cost of debt when calculating the WACC?

Question 4 options:

	a) The marginal (statutory) rate.
	b) The effective tax rate.
	c) None of the above.