What is a company's total weighted average cost of capital given an 11% weighted average cost of equity capital, 6% cost of debt capital, 40% debt, 60% equity, and a 25% tax rate? 8.4% 8.0\% 7.6% 9.2%= QUESTION 27 What is NOT Bn advantage of spending more money on stock repurchases and less on dividends? Investors may prefer more regular cash payouts (Bird in Hand Theory) and dividend yleld provides more of a floor for the stock price. It enables shareholders to decide themselves if they want to have a taxable event (through selling siock rather than automatically paying taxias with a dividend). A company has more flexbility to reduce (not do) repurchases than they do to cut dividends (less market reaction) Repurchases can be used to otiset empioyee stock compensation QUESTION 28 For which option like vehtile does the company recieve the "strike price" payment upfront when the vehicie is created? Exchange Traded shock Options Warrants: Employee 5tock Options Convertibles