Which of the following is a capital component when calculating the weighted average cost of capital (WACC)?

		Corporate bonds
		Accruals
		Long-term debt
		Accounts Payables

HSM Energy estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 9%, and its above-average risk projects have a WACC of 12%. Which of the following projects (A, B, and C) should the company accept?

		Project B is of below-average risk and has a return of 8.5%.
		Project C is of above-average risk and has a return of 11%.
		Project A is of average risk and has a return of 9%.
		None of the projects should be accepted.

Whats value of a preferred stock if we assume it has an annual dividend $2.5 per share and the required rate of return is 5%?

		$ 5
		$ 25
		$ 50
		$ 100

Other than dividend growth model, we can employ Market Multiple Analysis method for stock valuation. We suppose a firm's estimated earnings per share is $2.25. The average price to earnings (P/E) ratio for similarly publicly traded firms is 8. What's the firm's expected stock price?

		$50
		$25
		$22.5
		$18

A stock is selling for $50 in the market. The required rate of return is 10%. The most recent dividend paid is D₀ = $2.0 and dividends are expected to grow at a constant rate g. Whats the expected dividend yield for this stock?

		3.82%
		4.19%
		4.23%
		5.0%

To help finance a major expansion, a company sold a noncallable bond several years ago that now has 15 years to maturity. This bond has a 10.25% annual coupon, paid semiannually, it sells at a price of $1,025, and it has a par value of $1,000. If the companys tax rate is 21%, what component cost of debt should be used in the WACC calculation?

		5.88%
		6.69%
		6.95%
		7.84%

You were hired as a consultant to a company, whose target capital structure is 50% debt, 0% preferred, and 50% common equity. The before-tax cost of debt is 6.0%, the cost of preferred is 8.0%, and the cost of retained earnings is 13.0%. The corporate tax rate is 21%. The firm will not be issuing any new stock. What is its WACC?

		8.87%
		9.02%
		9.25%
		9.73%

According to the nonconstant dividend growth model discussed in the textbook, a stocks capital gain yield is different from its dividend growth rate during the initial noncontant growth period, but they are equal during the subsequent constant growth period.

		True.
		False.

Which of the following assets belongs to the non-operating assets?

		Accounts receivables
		Marketable securities
		Accounts payables
		Inventory