MODULE 16 SET

P1  M&M Proposition 2 states that the cost of a firm's common stock is directly related to the debt-to-equity ratio. both the debt-to-equity ratio and the required rate of return on the firm's underlying assets. the return of the market index. the required rate of return on the firm's underlying assets.

What is a firm’s cost of capital? Include discussions about debt, preferred stock, common stock and retained earnings. Keep in mind that the cost of capital is rate of return required by investors for a firm’s securities. When would you use debt, preferred stock, common stock or retained earnings?

For an unlevered​ firm, the cost of capital can be determined by using the​ ________.   A. Preferred stock yield   B. Yield to maturity on the traded debt   C. Capital Asset Pricing Model   D. Dividend yield

What is the blend of long-term financial sources used to finance the firm which may include debt, equity ?and preferred stock اخترأحد الخیارات a. Working Capital O b. Profit Maximization c. None of the option d. Risk and Return e. Capital Budgeting O

The cost of equity is ________. Group of answer choices A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnover

37.  Help me selecting the right answer. Thank you

FINANCE2A First Question

The cost of capital can be thought of as the rate of return required by investors in the firm's securities. O a. false O b. true

The cost of equity capital is all of the following EXCEPT: for A) The minimum rate that a firm should earn on the equity-financed part of an investment. B)The current market price per share of common stock times the number of shares outstanding. C)The sum of common stock and preferred stock on the balance sheet. D) The book value of the firm.

o raise capital, what are the pros and cons of selling bonds, compared to issuing stock or borrowing money from a bank in terms of raising capital?

1. Choose the best definition for a Stock? A. Being a creditor to a company B. Robin Hood C. Ownership shares of a company D. Voting shares in a company E. Ownership shares of a public company   2. When investing in stocks, there are two ways in which you can have a positive return. What are the components of this return called? A. Dividends and Capital Loss B. Robin Hood C. Coupon and Capital Gains D. Coupon and Capital Loss E. Dividends and Capital Gains

37. Lis/are a way to raise capital by selling ownership or equity: A. Issuing Stock B. Seeking Early-stage capital C. Issuing Bonds D. Developing profits E. Seeking a Bank Loan 38. is/are a way to raise capital through borrowing: A. Issuing Stock B. Seeking Early-stage capital C. Issuing Bonds D. Developing profits E. Mutual Funds 39. If a firm's revenues are greater than costs, then the business would be considered:

The relationship between WACC and investors' required rates of return The required rate of return of an investor is the rate of return that an investor demands to purchase a firm’s stocks or bonds and thus provide funds for capital investment. Therefore, required returns from the investors’ point of view correspond to the required returns or the weighted average cost of capital (WACC) from the firm’s point of view. Indicate in the following table whether each of the statements about WACC and the required rates of return of investors is true or false. Statement True False Flotation costs increase the cost of newly issued stock compared to the cost of the firm’s existing, or already outstanding, common stock or retained earnings.       The firm’s cost of debt is what an investor is willing to pay for the firm’s stock before considering flotation costs.       The amount that an investor is willing to pay for a firm’s bonds is inversely related to the…