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Multiple choice questions: and justify your choice ? 3- If cost of debts is 8%, debt weight is 40%, and cost of equity is 14%,

Multiple choice questions: and justify your choice ?

3- If cost of debts is 8%, debt weight is 40%, and cost of equity is 14%, then WACC is equal to: a. 12% b. 12.6% c. 10.6% d. 14.6%

4- If the par value of a bond is $1000, coupon rate is 10%,and market interest rate is 12%, the bond is selling at: a. Discount b. Premium c. Par value d. Market value

5- XYZ co., issued a bond that earns $50 annually, if the market interest rate is 10% and date to maturity is 2 years, the fair value of the bond is equal to: a. $1000 b. $1050 c. $950 d. No one of the above.

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