Q11. A company has $5 million in debt outstanding with a coupon rate of 12%. Currently the YTM on these bonds is 14%. If the tax rate is 40%, what is the after tax cost of debt?
A) 7.2%. B) 8.4%. C) 5.6%.
Q12. The expected annual dividend one year from today is $2.50 for a share of stock priced at $25. What is the cost of equity if the constant long-term growth in dividends is projected to be 8%? A) 18%. B) 19%. C) 15%.
Q13. The cost of preferred stock is equal to the preferred stock dividend:
A) divided by its par value. B) multiplied by the market price. C) divided by the market price.
Q14. The expected dividend one year from today is $2.50 for a share of stock priced at $22.50. The long-term growth in dividends is projected at 8%. The cost of common equity is closest to: A) 15.6%. B) 19.1%. C) 18.0%.
Q15. A $100 par, 8% preferred stock is currently selling for $80. What is the cost of preferred equity? A) 10.8%. B) 8.0%. C) 10.0%.
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发表于 2009-1-22 09:45
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