BEC 무료 덤프문제 온라인 액세스

The imputed interest rate used in the residual income approach to performance evaluation can best be
described as the:

• A.Historical weighted average cost of capital for the company.
• B.Average return on investments for the company over the last several years.
• C.Target return on investment set by the company's management.
• D.Marginal after-tax cost of capital on new equity capital.

All of the following are alternative marketable securities suitable for investment, except:

• A.Bankers' acceptances.
• B.Eurodollars.
• C.Commercial paper.
• D.Convertible bonds.

All of the following are valid reasons for a business to hold cash and marketable securities, except to:

• A.Maintain adequate cash needed for transactions.
• B.Earn maximum returns on investment assets.
• C.Satisfy compensating balance requirements.
• D.Maintain a precautionary balance.

Youngsten Electric is contemplating new projects for the next year that will require $30,000,000 of new
financing. In keeping with its capital structure, Youngsten plans to use debt & equity financing as follows:
. Issue $10,000,000 of 20-year bonds at a price of 101.5, with a coupon of 10%, and flotation costs of
2 .5% of par value.
. Use internal funds generated from earnings of $20,000,000.
The equity market is expected to earn 15%. U.S. treasury bonds currently are yielding 9%. The beta
coefficient for Youngsten's common stock is estimated to be .8. Youngsten is subject to a 40% corporate
income tax rate. Youngsten has a price/earnings ratio of 10, a constant dividend payout ratio of 40%, and
an expected growth rate of 12%.
Assume Youngsten has an after-tax cost of debt of 9% and an after-tax cost of equity of 15%.
Youngsten's weighted average cost of capital is:

• A.11.0%
• B.11.8%
• C.12.0%
• D.13.0%

When the federal government imposes health and safety regulations on certain products, one of the most
likely results is:

• A.Increased supply of the product.
• B.Greater consumption of the product.
• C.Higher prices for the product.
• D.Lower prices for the product.