I. In capital budgeting, the is the appropriale dicount rate to me whee calelati

Question

I. In capital budgeting, the is the appropriale dicount rate to me whee calelating the NPV of a project. A. WACC B. IRR C. cost of deb D. beta E. cost of equity 2 WACC is the average cost of A. IRRs B. Financing sources C. Initial investnents D. Rates of return E. Current ratios 3. Kroger's before-tax cost of bond is 93 percent. What is the afñee tas cost of hond if Koger's tas rate is 35%? A. 638% B. 595% C, 55% D. 4.88% E.6.18% You bought a share ofstock6rSSper share. Aner holding'host."An"years, you sold the stock for $42 per share. What is the holding period return and effective annual reture on this investment? 4. A. 881%, 41.63% B. 740%, 30.48% C. 740%,2843% D 881%,30 48% E. 740%, 2668% You bought MedTech Corp stock for $34 per share last yew. Ater receiving a 52 per share dividend you sold the stock for $64 this year. What is your percent return A.22.22% B. 18.52% C. 30.00% D. 25.00% E. 23.02% 6. Gary bought a share of stock for $15.75S that paid a dividend of 50.45, and sold three months lats o $17.35. What was his dollar profie or loss? A. $3.1 B. $3.35 C. $4.15 D. $2.05 E. $3.05 7. IMB Inc. has a 15-year bond selling for $850 and pays a 7 percent omlem semi annually. w hat would he IMi'S annual befiore-tax cost of debe (hsond), if investment bank ing fee in s0? A. 882% B. 815% C. 10.39% D. 921% E. 9.53%

Explanation / Answer

1)

WACC is the cost of capital of the firm considering all the sources costs and their weights. WACC is calculated using after tax cost of sources of fianance. It is most appropriate for NPV calculation.

Hence, correct option is (A) WACC.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---