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.
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.
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