Which one of the is following a correct statement concerning the subjective approach to the cost of capital? The subjective approach is based on finding a pure play firm to model risk. The subjective approach always increases the WACC (weighted average cost of the capital). The subjective approach always increases the WACC for that riskier than the firm is, The subjective approach always increases the WACC for the projects that they are less risky than the firm is. What is your if you own portfolio beta, if you own a stock portfolio inverted 20 percent in stock. Q: 30 percent in Stock and 50 percent in Stock S. beta for these stocks Which one of the following is a correct statement? An increase in the dividend growth rate increases the cost of equity. Current tax laws discourage firms of a firm will decrease the firm's cost of capital. A decrease in a firm's debt-equality ratio will usually decrease the firm's cost of capital. Rogue One's has a cost of equality of 11.1 percent. The market risk premium is 7 percent, the risk free rate is 2 percent, and Rogue one's beta is 1.3, Rogue one is acquiring (via invasion expropriation another firm called Yarvin-4, which will increase the company's beta to 1.4 form 1.3. What effect, if any, will be the acquisitions on Rogue one's cost of equity capital? no effect increase of 2 percent an increase of, 4 percent an increase of .7 percent Usinger's sausage percent bonds outstanding that mature in 19 years. The bonds pay interest semiannually and have value of $1,000. Currently, the bonds are selling for $989 each. What is cost of debt? 8.06 percent 8.11 percent 8.18 percent 8.23 percent The Pampered Pouch cost of equity is 12 percent and its after-tax cost of debt is4 percent. What is the firm's weighted average cost capital if its debt-equity ratio is 2/3? 6, 6 percent 7, 7 percent 8, 8 percent 9, 9 percent A toy firm is about to invest Deer Park, an amusement park with pumper cars, petting zoo, a Ferris wheel and a miniature course. The toy firm's WACC is 15% But it thinks that the amusement park business could different than a toy firm. To evaluate the NPV of Deer Park, it: Could find have risks the average cost of equity of other amusement parks. Could use a subjective estimate of raising or lowering the risks compared to toy firm's 15%. Could try to find another with Ferris cars and use firm as a Pure Play. could do any of the above to find a risk-adjusted WACC. You own the following portfolio of stocks two stocks, Hare Inc. Tortoise Enterpises. Use the following table to help you, but please find the expected form return of the portfolio of the Hare & Tortoise