答案和详解如下！ Question 77 When evaluating the qualifications of a board member, which of the following is least likely to be considered a positive factor? The board member: A) has board membership in excess of 10 years. B) regularly attends meetings. C) has made public statements regarding his ethical positions. D) has experience on other boards.
The correct answer was A) has board membership in excess of 10 years. While board membership in excess of 10 years may add experience, it also may indicate a board member who has developed an unhealthy alliance with management.
This question tested from Session 11, Reading 48, LOS d
Question 78 Which of the following is most accurate regarding the component costs and component weights in a firm’s weighted average cost of capital (WACC)? A) The dividend exclusion for corporate investments in preferred stock reduces the after-tax cost of preferred stock. B) The weights in the WACC should be based on the book values of the individual capital components. C) The appropriate pre-tax cost of a firm’s new debt is the average coupon rate on the firm’s existing debt. D) Taxes reduce the cost of debt for firms in countries in which interest payments are tax deductible.
The correct answer was D) Taxes reduce the cost of debt for firms in countries in which interest payments are tax deductible. The after-tax cost of debt = kd(1 – t) = kd – kd(t), where kd is the pretax cost of debt and t is the effective corporate tax rate. So the tax savings from the tax treatment of debt is kd(t). The dividend exclusion for corporate holders of preferred stock may be beneficial to the investing firm, not the issuing firm. Capital component weights should be based on market weights, not book values. And, the appropriate pre-tax cost of debt is the yield to maturity on the firm’s existing debt. This question tested from Session 11, Reading 45, LOS f | 
发表于 2008-5-10 15:45
| 
