the coi co b.) fadse 2) The cest of debt used for ealesfeline the Woccis an aites-iax cast. a) true b) false 3) imvontory is considered one of the components used in the calculation of the WACC a) true b) folse 4) if a coenpary does not pay a dividend, then the CAPPA thould bee used to calculate the cost of commoninternal equay a) trae: b) fahe 5) The cost of perefred stock shoutd be lower than the cost of debt? a) true b) false 6) A company currentfy pays a dividend dot 52.50, whin evpected growth of 5 se. The dividend amount used to calculate the cost of common equity should be \$2.50 a) truc b) false: 7) if a firm's WACC is 8.5%, then it should investin project, A which thas an expectod roturn of 7.5%. a) true b) talse 8) Because the CAPM approach uses BETA in it's calculation. it is a better measure of risk than the dividend growth model. a) true b) false 9) When calculating the YTM for debt, the PV used in the calculation should be net of any discounts and underwriting fees. a) true b) false 10) The difference in the cost of new common equity and retained earnings is a) opportunity cost c) flotation cost b) taxes d) growth estimates