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NEW QUESTION: 1
A firm's capital structure has a debt-to-equity ratio of 0.8. The pretax cost of debt is 7%. The beta of the stock is 1.3 in an environment with risk-free rate of 5.5% and an expected market return of 16%. The firm is in the 45% tax bracket. The weighted average cost of capital of the firm equals ________.
A. 13.81%
B. 6.91%
C. 12.35%
D. 9.43%
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Using CAPM, the cost of equity equals 5.5% + 1.3*(16% - 5.5%) = 19.15%. Since the debt interest is tax deductible, the after-tax cost of debt equals 7%*(1-0.45) = 3.85%. Now, the D/E ratio = 0.8. Hence, (D+E)/ E = 1.8, giving E/(D+E) = 0.556. Thus, equity forms 55.6% of the capital while debt forms 44.4%. The WACC is then equal to 0.556*19.15% + 0.444*3.85% = 12.35%.

NEW QUESTION: 2
What is the result of issuing the frame-relay map ip 192.168.1.2 202 broadcast command?
A. defines the source IP address that is used in all broadcast packets on DCLI 202
B. defines the DLCI on which packets from the 192.168.1.2 IP address are received
C. defines the destination IP address that is used in all broadcast packets on DCLI 202
D. defines the DLCI that is used for all packets that are sent to the 192.168.1.2 IP address
Answer: D
Explanation:
Frame-relay map ip 192.168.1.2 202 command statically defines a mapping between a network layer address and a DLCI. The broadcast option allows multicast and broadcast packets to flow across the link. The command frame-relay map ip 192.168.1.2 202 broadcast means to mapping the distal IP
192.168.1.2 202 to the local DLCI . When the "broadcast" keyword is included, it turns Frame Relay network as a broadcast network, which can forward broadcasts. http://www.cisco.com/en/US/docs/ios/wan/command/reference/wan_f2.html#wp1012264

NEW QUESTION: 3

A. Option E
B. Option F
C. Option D
D. Option B
E. Option A
F. Option C
Answer: B,F

NEW QUESTION: 4
Click the Exhibit button.

What does the exhibit represent?
A. UPS control panel
B. Pneumatic door opener
C. Emergency power off (EPO) button
D. Fire suppression de-activation (FSD) button
Answer: C