Cost of capital exam questions and answers

 

  Working capital is a firm’s investment in short-term assets--cash, marketable securities, inventory, and accounts receivable. 40000.  Assume a company's target capital structure is 50% debt and 50% common equity.  Therefore, Overall Cost of Capital Rate = 80,000 /8,60,000 x 100 = 9.  1.  Use the following information to answer the following questions.  Choose your answers to the questions and click 'Next' to see the next set of questions. 50.  we a) Suppose in SR capital is fixed at 5 units, find short run TC function.  The four exams cover a wide variety of topics taught in most University accounting programs.  federal corporate tax rates for the 2007 tax year.  Page 1 of 10 PD5 Exam Exemplar Questions Mar2013 QUESTIONS AND INDICATIVE ANSWER CONTENT used is generally the appropriate weighted average cost of capital (WACC) Test Your Knowledge If you can’t answer all of the questions below without firm to raise capital.  cost of capital; and risk and return.  (c) If the price of labor is 1, w=1, and the price of capital is 2, r=2, derive the long run total cost function (that is, total cost as a function of output, x).  Depreciation method should be rational and systematic.  Costs of Capital ~ Required Rates of Returns (RROR) by Investors and or Shareholders Cc/s > Cr/e because External Funding via C/S has Stock Issuance Costs ~ Float % Capital Source Funding Increases : (WACC) Increases : Marginal Cost of Capital (MCC) Increases CAPM Sample Test Questions (correct answers are bolded) 1.  Solvency and leverage is captured by an analysis of the capital structure of the firm and the firm's ability to pay interest.  This question required candidates to calculate the after-tax weighted average cost of capital (WACC) of the company, where there were four distinct sources of finance. com stores a huge COLLECTION OF QUESTIONS AND SAMPLES, which you can refer to any time you want.  Econ 340 Alan Deardorff Fall Term 2018 FDI Study Questions (with Answers) Page 1 of 4 (5) Study Questions (with Answers) Lecture 11 Multinationals and International Capital Movements sample questions The following questions illustrate the range of the test in terms of the abilities measured, the disciplines covered, and the difficulty of the questions posed.  (d) Suppose that we are in a short run situation in which the capital input 1 Dr. 94%.  The marginal weights represent the proportion of various sources of funds to be employed in raising additional funds.  The CAPM exam consists of 150 multiple-choice questions, 15 of which are pretest questions used to design future versions of the CAPM exam.  a) what is the slope of this line? what would be the slope if you put x on the vertical axis? The cost savings from the equipment would result in an annual increase in net income of $200,000.  Series7 Latest Test Answers - Series7 Valid Test Questions Pdf - Finra Series7 Latest Test Cram Sheet - Onlinemarketingrant by Brook Lenox on May 16, 2009 Once you find it unsuitable for you, you can choose other types of the study materials.  those costs that will change as a direct result of the project).  A monopolist’s costs are given by: TC = 2 + 4Q.  Since debt capital can cause a company to go bankrupt but equity capital cannot, debt is riskier than equity, and thus the after-tax cost of debt is always greater than the cost of equity.  10 marks (5 marks each) A capital investment project requires an investment of $350,000.  PART II (FINANCIAL MANAGEMENT) OF THE QUALIFYING EXAM – 2003 Multiple-Choice Quizzes for FUNDAMENTALS OF FINANCIAL MANAGEMENT The following financial management web quizzes are grouped to correspond with the chapter headings in Fundamentals of Financial Management , 13th ed.  b.  Calculate the total present value of inflows and outflows if the rate of discount is 10% assuming that $ 10.  30.  Practice Practice Free Response Practice Exams FAQ Econ 340 Alan Deardorff Fall Term 2018 Comparative Advantage Study Questions (with Answers) Page 5 of 7 (9) 11.  Accounts interview questions are, normally, questioned from basic accounting level and to the extent types of business entity position.  The tax-adjusted cost of debt is always greater than the interest rate on debt, provided the company does in fact pay taxes. * labor will be substituted for capital c.  The tax-adjusted cost of debt is always greater than the interest rate on debt, provided the company does in fact pay taxes .  Which of the following equals the annual growth rate of ‘effective labor’ in the steady state in this economy? Use the following information to solve the next 4 questions about a monopolistic market. 5%. If the present value of Re. 05 = 0.  a BQK Co has a real after-tax cost of capital of 9% per year and a nominal after-tax cost of capital of 12% per year.  Question 1 .  Ask your economics question here, and our economics experts will answer it for free.  Here is an objective type Test on the short answer questions of Financial Management that covers topics including Working Capital, Cash Management Systems, Inventory Management, Valuation of Bonds and Shares, Capital Budgeting, Cost of Capital, Cost-Volume-Profit, Budgetary Control and others.  FIN Reliable Test Camp Questions & FIN Latest Test Certification Cost & Cpa FIN Latest Exam Questions Answers - Smartypantsdaycare.  The Payback Period method focuses on recovering the cost of investments.  It has an expected life of ten years with annual cash flows of $50,000 received at the end of each year.  Answers multiple choice questions on capital structure dealing with optimal capital structure, financial leverage, debt-equity ratio, financial risk, bankruptcy, M&M Proposition I, M&M Proposition II, static theory of capital structure, EPS, break-even level of earnings before interest and taxes, dividend income, cost of equity, tax shield, levered value of the firm, value of the unlevered A) If the firm takes on more debt, the debt becomes riskier and the cost of capital for the debt increases.  Sample Exam Questions Sample Quiz CFP Board makes available an online sample quiz made up of 10 questions that have appeared in previous administrations of the CFP® Certification Examination and represent the topic areas covered by the current CFP® exam.  The aftertax cost of debt is 7.  Accounting interview questions and answers are generally, related to finance interview questions, general accounting and basics and interview questions.  The following are samples of the types of questions that may appear on the exam. 30 and has a weightage of 11.  Finance Multiple Choice Questions: Capital Budgeting and Valuing.  twice as much capital as labor will be employed 107.  This real form was used by a bank to hire a new analyst or associate.  costs (i.  Unlike variable costs, (such as fuel costs for an airline), fixed costs are the same regardless of patient volume.  Working Capital Management Interview Questions & Answers 4 avg.  The cost of capital for a firm -- when we allow for taxes, bankruptcy, and agency costs -- remains constant with increasing levels of financial leverage.  Long-term interest rates have declined dramatically over the past two decades.  Learn cost of capital MCQs, mastering financial management test 1 for theory test prep with e-learning online certificate courses.  Since new stock has a higher cost than reinvested earnings, Flagstaff would like to avoid issuing new stock.  To answer the question you need to discuss the overall working capital levels, and then the individual Cost of capital refers to the opportunity cost of making a specific investment Questions and answers on cost of capital.  Financial options and applications in corporate finance quiz has 68 multiple choice questions. 00.  646 Questions + Answers of the CFA EXAM Level 1 but flotation costs of 5 percent would be answer to the Capital Structure debate, and remains an important Cost of capital consists of both the cost of debt and the cost of equity across all sources, including common shares, preferred shares, and debt.  6 is compulsory and answer any 2 from the rest questions in Group B.  Once you have completed the test, click on 'Submit Answers for Grading' to get your results.  Straight-line depreciation method allocates same amount of depreciation expense in each period.  New investments are required by the company to have a before-tax return on capital employed (accounting rate of return) on an average investment basis of 20% per year.  and assume this cost Its cost of common stock is 18% and its cost of debt is 10%.  represent cash inflows, K is the firm’s cost of capital, C is the cost of the investment proposal and n is the expected life of the proposal.  After tax net income from the project has been calculated at $22,00 per year including a deduction for depreciation of $30,000 per year.  Cost of Capital Overview Chapter Exam Instructions.  No scratch paper is The cost of capital is 9.  Financial management multiple choice questions and answers on cost of capital, overview of financial management and environment, time value of money, stocks valuation and stock market equilibrium, bonds and bond valuation.  The Sample Test Bank for Fundamentals of Financial Management Concise 7th Edition by Brigham includes 32 True False Questions in 1 sections.  The marginal cost of capital is the weighted average cost of new capital calculated by using the marginal weights.  .  Directions: This section contains independent questions as well as questions related to case-based scenarios.  58 Chapter 12 Capital Structure Answers to Concept Review Questions 1.  The equipment will have an initial cost of $1,200,000 and have an 8 year life. e.  You know that the firm's cost of debt capital is 10 percent and the cost of equity capital is 20%.  Mujhe audit nt kahi bhi nahi mil rahe hai and ecl me provie fdi , ftp chapter in hindi and dec 2015 capitl market securiti law amendment note provide in hindi .  management by opinion D.  3.  If you need a solution to the entire set of questions or assistance with an economics project, order now , and our economics experts will help you for a reasonable price. 50000 The optimal capital structure simultaneously minimizes the cost of debt, the cost of equity, and the WACC.  Questions for freshers and experienced for bank interview, competitive exams, placement interview, finance interview, manager interview, university exams CA, CS, ICWA etc. 2,000 life 8 years & cost of Capital is 10%.  Bond Review Questions Vaggio Corporation issued $400,000 of 8% bonds on October 1, 2009, due on October 1, 2014.  100 each and realizes Rs.  Capital Budget d.  the price of capital will fall, and price of labor will rise d. 12 or 12% (I am currently entering workings so that when you submit an answer, the software will show the working for the correct answer.  Final Exam .  Not only will we fully consider for customers before and during the purchase on our 1z0-416 Exam Cost practice guide, but we will also provide you with warm and please provide suggest answer june 2015 in hindi because will get tip for written in exam and please provide audit note in hindi .  Hence, all four The cost of capital used in capital budgeting should be calculated as a weighted average, or composite, of the various types of funds a firm generally uses. (8) A firm can produce each unit of output with 1/2 unit of capital (K) or 1 unit of labor (L).  What should the price of this stock be using a constant DDM model? A.  Try the multiple choice questions below to test your knowledge of this chapter.  Its dividend is expected to grow at a constant rate of 7 percent per year.  STUDY GUIDE FOR ECO 103-080 and capital.  True 2.  PP represents the amount of time that it takes for a capital budgeting project to recover its initial cost.  Exam#060590 Corporate Finance Part A: Answer each of the following questions in one to three sentences, and perform calculations as requested. ) c) (14 points) Using your answers to parts (a) and (b) along with the other information provided, estimate the weighted average cost of capital (WACC) for this firm.  The current stock price is $30.  Clyde Prestowitz, in his assigned reading, cites a study that measures various costs of 646 Questions + Answers of the CFA EXAM Level 1 then the flotation cost will be $5 per share. com community of teachers, mentors and students just like you that can answer any question you might have on Economics The marginal cost of production is Rs.  The exam contains 100 questions to be answered in 2 If a firm has capital stock valued at $4,500 at the beginning of the year, invested (in physical capital) $1,500 during the year, and ended up with a capital stock valued at $5,000 at the end of the year then Review exam prep concepts of aggregate economics like supply, demand, trade, specialization, and inflation with Albert's AP® Macroeconomics practice questions.  Here you may also find Question Papers for all past attempts and these question papers are very helpful for upcoming exam preparation.  You know that the firm’s cost of debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed with debt? IGCSE Business Studies: Questions and Answers 4 Answers Answer Marks 1(a)(i) For each of the following businesses identify the factors of production used in the production process, state whether the business is capital-intensive MyAssignmenthelp.  In capital budgeting, cost of capital is used as discount rate and is based on pre-determines a) cost of inflation b) cost of debt and equity c) cost of opportunity d) cost of transaction be interpreted to answer questions such as; as land (R) or capital (K).  Depreciation is the process of allocating the cost of property, plant and equipment over the life of the asset.  is considering an investment of $200,000 in a project with a 5 year economic life.  Cost of capital measures marginal cost of issuing new securities to finance projects. Financial management is concerned with the maintenance and creation of wealth.  increases by the same percentage as volume increases Incorrect b.  Exam 3 Sample Questions sample exam, you should try to answer each question before looking at the answer. ) The cost of capital considers the cost of all funds - whether they are short-term, long-term, new or old.  Product cost meaning: In accounting, a retailer’s product cost is the cost paid to a supplier plus any other costs that are necessary to get the product in place and ready for sale.  This activity contains 10 questions.  rating (80% score) - 1 votes Are you a person with fast and accurate working knowledge of Ms Word, Excel and Power Point.  You can save some time by structuring your answer to part (a) in a way that will give you some of the numbers Practice Questions and Answers from Lesson III-1: Inputs and Costs The following questions practice these skills: Identify total cost, variable cost, fixed cost, marginal cost, and average total cost. S.  if the 20 questions are synthesis questions (require two or three thought processes to solve) Example: Leather and beef are jointly produced such that an increase in the production of one results in an equal increase in the production of the other.  You might also be interested in: Sample Test Bank for Fundamentals of Financial Management Concise 7th Edition by Brigham Multiple Choice Questions While the initial cost to identify and quantify the differences between U.  Below are a set of sample test questions taken from previous exams in Development Economics.  Graph the line given by the equation y=15-5x, with y on the vertical axis.  Choices "a", "b", and "c" are incorrect, per above.  Capital structure: Both the equity multiplier and the debt-to-equity ratio tell us that the firm has become less levered.  a) Capital b) Revenue c) Deferred revenue d) Capital Loss Q18] Change in the capital A/c of proprietor may occur due to ______ a) Profit earned b) Loss incurred c) Capital Introduced d) All of the above Exam questions often ask how working capital can be managed effectively.  Financial management quiz questions and answers, MCQs on financial statements analysis, financial management overview, capital budgeting, cash flow analysis, cash flow estimation and risk analysis, applications in corporate finance MCQs with answers, financial options, bonds, bond valuation, cost of capital, environment, portfolio theory MCQs The examination questions are also available in Afrikaans.  Online accounting lessons, tutorials, articles, questions and exercises with solutions.  The short answer/graphing go through to the 110 Questions(with Answers) On Accounting Basics According to periodic matching of cost and revenue concept, a business man 106 Acid test ratio is equal to Earn college credit for what you already know at a fraction of the cost by taking • Test format: 100 multiple choice questions (1 point each) Capital Stock 5.  will have to issue new common stock to fund its capital budget.  You will find that Smartypantsdaycare Oracle 1z0-416 Exam Cost exam questions and answers are most thorough and the most accurate questions on the market and up-to-date practice test. 000 2. 0 x 1.  Weighted Average Cost of Capital.  Input prices equal $30 for labor and $60 for capital, while the marginal products are 6 for labor and 3 for capital.  The salvage value of the equipment is estimated to be $200,000.  managerial effort C.  In Cost accounting multiple choice quiz questions and answers, accounting exam revision and study guide with practice tests for CA/ICCI/ACCA exam prep and interviews Marginal Cost of Capital .  EXAM REVIEW SHEETS AND PRACTICE EXAM QUESTIONS.  The Traditional Approach to Value of the firm m that: (a) There is no optimal capital structure,(b) Value can be increased by judicious use of leverage (c) Cost of Capital and Capital structure are m dent,(d) Risk of the firm is independent of capital structure 18.  Great accounting study material for students and accounting refresher for accountants, managers and business owners.  Specimen Exam applicable from June 2014 Booklet to indicate your chosen answer to each multiple choice question.  Select the best answer for each question.  Cost of equity = ((36.  Section A – Cost Accounting (Full Marks: 60) Question No.  The cost of capital considers the cost of all funds - whether they are short-term, long-term, new or old.  It is the rate of return that could have been earned by putting the same money into a different investment with equal risk.  You may use the lecture notes and the textbook during the exam. 1: (Compulsory question) Answer the followings: (a) List the objective of CAS-4.  b .  Production and Cost Functions.  It should be noted that the cost of capital, K, is assumed to be known, otherwise the net present, value cannot be known.  Every time you find something useful, you can save that using the bookmark tool.  The return shareholders require on their investment in a firm is called the: a. ) The firm has a cost of equity of 12% and a cost of capital of 9.  Assume you are to receive a 20-year annuity with annual payments of $50.  2013 Question Paper, June 2013 Question Papers, Dec 2012 Question Paper, June 2012 Question Papers etc.  Be sure to answer all 4 questions.  It is the minimum rate of return the firm must earn overall on its existing assets.  Capital budgetingis the decision process used to identify those investment projects that are likely to add value to the firm, and it is perhaps the most important task faced by financial managers and their staffs.  affect the cost of capital Capital Budgeting Chapter Exam Instructions.  Similarly, fixed staff are those present, regarless of patient volume.  Chapter 16.  10 Sample BEC Practice Questions Here are 10 BEC practice questions with detailed answers that will give you an idea of the type of questions you can find our BEC test bank.  As we all know, it is difficult for you to prepare a FIN Reliable Test Camp Questions exam by yourself.  Free skills assessment test is for online learning weighted average cost of capital quiz questions with MCQs, exam preparation questions and answers to prepare entrance exam for admission in top executive MBA programs.  The weights used in calculating the firm’s weighted-average cost of capital are equal to the proportion of debt and equity ____.  Answer the following questions from this information: The amount of sales to earn a profit of Rs. 401 Sample Final Exam – Fall 2008 • Answer these examination questions without consulting anyone.  The sales price is estimated at $750 per unit, give or take 2 percent.  In light of theses facts, _______ are examples of fixed staff and _____ are examples of variable staff.  Year end Cash inflows $ 1 2,30,000 2 2,28,000 3 2,78,000 CHAPTER 14 COST OF CAPITAL Answers to Concepts Review and Critical Thinking Questions 1.  This includes acres of land, deposits of the production and cost relationships Cost of capital refers to the opportunity cost of making a specific investment Questions and answers on cost of capital.  C) Inadequate DSST® PRINCIPLES OF FINANCE EXAM INFORMATION .  Stock A has a required return of 10 percent.  Cost of Capital Practice Problems 1.  The short-run cost function is: Answer .  • The company cost of capital = expected return on assets.  How firms estimate their cost of capital: The WACC for a firm is 13.  As volume increases, the total cost of a mixed cost a.  If you visit our website on our 1Z0-1024 Certification Cost exam braindumps, then you may find that there are the respective features and detailed disparities of our 1Z0-1024 Certification Cost simulating questions.  A descriptive test key, including question sources and answer rationale, has been provided.  So far this is happening for the first 10 tests, but it will happen for all the tests within a few more days 🙂 ) value, equity beta, cost of debt, cost of equity, and weighted -average cost of capital, assuming the two Modigliani and Miller propositions hold.  The investment cost of the project is i.  Each of Each of the questions or incomplete statements is followed by four suggested answers or completions.  CHAPTER 18 INTERNATIONAL CAPITAL BUDGETING SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1.  o Describe the effect of corporate tax and costs of financial distress, including the From Section B: Question no.  Need to know – All of the general material to estimate Cost of Capital, including after-tax cost of debt, cost of preferred stock with floatation costs, and the three methods of calculating the cost of common equity.  The optimal capital structure simultaneously maximizes stock price and minimizes the WACC.  Give yourself marks for mentioning any of the points below: a) Net present value is the present value of future income from an investment project, less the cost.  The capital structure weights used in computing the weighted average cost of capital: A.  F3 Financial Strategy Questions and answers from past such a question in the CIMA Exam Practice Kit, which made me quite anxious.  where all inputs to the production process are variable If you visit our website on our 1z0-965 Reliable Exam Cost exam braindumps, then you may find that there are the respective features and detailed disparities of our 1z0-965 Reliable Exam Cost simulating questions.  The first payment will be received at the end of Year 1, and the last payment will be received at the end of Year 20.  Use the following information to answer questions 7 and 8: at a cost of $20 per square foot.  To obtain a copy, please contact the Examinations Department at SAICA.  The current dividend of Datacorp.  The weighted average cost of capital ( WACC ) is defined as the weighted average cost of the component costs of debt, preferred stock, and common stock or equity.  16-1 a.  A.  DeVry BUSN379 Final Exam Study Questions and Answers Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.  95 per Debenture.  Answer: B The cost of formation. 05) / 540) + 0.  50 percent .  The Payback Period (PP) is perhaps the simplest method of looking at one or more investment projects or ideas.  So far this is happening for the first 10 tests, but it will happen for all the tests within a few more days 🙂 ) But our FIN Reliable Exam Cost exam questions have made it.  The questions for the CAPM exam are taken from the 12 chapters of the Project Management Body of Knowledge.  B.  (c) If the company’s cost of capital is 8% and the anticipated growth rate is 5% p.  Chapter 9.  first declines and then ultimately rises with increasing levels of financial leverage.  I am CIMA qualified and experienced both the frustration of failure and the relief of finally passing all my exams.  ANSWERS TO END-OF-CHAPTER QUESTIONS.  Cost of capital includes the cost of debt and the cost of equity, and is used by companies internally to judge whether a capital project is worth the expenditure of resources, and by investors who Cost of equity = ((36. , calculate the indicated market price if the dividend of $1 per share is to be maintained.  With its current financial policies, Flagstaff Inc.  All of the above.  chapter 17 international capital structure and the cost of capital suggested answers and solutions to end-of-chapter questions and problems questions (The terminal value is the value of the equity or firm at the end of year 5.  In this answer to this interview question, it’s important to consider the company’s normal working capital cycle Working Capital Cycle The working capital cycle for a business is the length of time it takes to convert net working capital (current assets less current liabilities) all into cash.  From the next time, you can access that from your personalized library. 3349,calculate the present value index.  Coogly Company is attempting to identify its weighted average cost of capital for the coming year and has hired you to answer some questions they have about the process.  ECO 550 Final Exam 36 Questions with Correct Answers .  The capital structure that minimizes the firm's weighted average cost of capital is also the capital structure that maximizes its earnings per share.  It has a cost F9 Chapter 15 Questions Test 2 – The valuation of securities – theoretical approach F9 Chapter 16 Questions – The valuation of securities – practical issues F9 Chapter 17 Questions – The cost of capital Peter's Audio Shop has a cost of debt of 7%, a cost of equity of 11%, and a cost of preferred stock of 8%.  The interest is to be paid four times a year on January 1, April 1, July 1, and October 1.  Overview of financial management and environment quiz has 99 multiple choice questions.  In addition, the BEC will now include 4 task-based simulations going forward which are weighted at 35% of the total exam score.  If you need assistance with your economics homework problems or need answers to economics worksheet, test or quiz questions, be it multiple choice or free answer questions, Assignment Expert will be glad to provide it. 60 each and fixed cost is Rs.  15.  b) Use Lagrangean to derive firm’s LR conditional factor demands for capital and labor (You can substitute input prices into the total cost to make calculations easier.  In question 9, the discount rate has been ignored because we do not take into account the time value of money while computing simple payback period.  rest all are written in capital letters, how the month "September" be written.  The relevant cost of capital for Civics Questions for the 65/20 Exemption The Immigration and Nationality Act provides for special consideration of the civics test for applicants who, at the time of filing their Form N-400, Application for Naturalization, are over 65 years old and have been a permanent resident for at CFIN300: Final Exam: Spring 2006 Version #4 Multiple Choice Questions: Please answer the 50 multiple choice questions on the scanner sheet provided.  assumption about the cost of debt in order to answer this question. E.  MICROECONOMICS SECTION I Time - 70 minutes 60 Questions Directions: Each of the questions or incomplete statements below is followed by five suggested answers or All test questions are in a multiple-choice format, with one correct answer and three incorrect options.  - To estimate the weighted average cost of capital, we need to know the cost of each of the sources of capital used and the capital structure mix.  Assuming that the target debt/equity ratio is 50% and the company tax rate is 34%, calculate the overall cost of capital.  QUESTION NO: 4 Advanced / MBA Finance Interview Questions and Answers These are questions that are also asked for junior-year Summer Analyst, full-time Analyst, and MBA job interviews.  - To calculate weighted average cost of capital (WACC) that uses debt and common stock.  The rate of depreciation is 12% per year, the population growth rate is 2% per year and the growth rate of technology is 3% per year. The current ratio and the acid test ratio are both measures of financial leverage.  c.  Investment banking interviews Investment Banking Interview Questions & Answers Investment banking interview questions and answers.  These securities are issued at market value.  a capital employed of $200,000.  You can skip questions if you would like and come back to them Work out the internal rates of return of the project given in Self-examination question 1 (a) and (b) Answer to sample questions .  The capital structure weights used in computing the weighted average cost of capital: 88 Useful Free CFA Level 2 Capital structure questions and answers on topics like capital structure, principles of capital structure management, internal & external factors affecting capital structure.  Cost of equity is typically estimated using the capital asset pricing model (CAPM), which links the expected return of equity to its sensitivity to the overall market (see WSP’s DCF module for a detailed analysis of calculating the cost of equity). 1received annually for 8 years at 10% rate is 5. 50 percent; and the cost of common equity (in the form of retained earnings) is 14 . 000 80.  capital will be substituted for labor b.  Chapter 11 The Cost of Capital ANSWERS TO SELECTED END-OF-CHAPTER QUESTIONS The weighted average cost of capital, WACC, is the weighted average 11-14 This is I help people like you pass their CIMA exams and provide career guidance so that you can acheive the career success you really want.  The BEC CPA exam has 62 multiple choice questions instead of the previous 72 with a reduced weighting of 50% from the previous 85%.  In this page, you may find CS Executive June 2018 attempt question papers, June 2017, June 2016, December 2015, June 2015, December 2014 June 2014, Dec.  Cost of capital quiz has 53 multiple choice questions.  This is due to the fact that our 1Z0-548 Test Questions And Answers test braindumps are humanized designed and express complex information in an easy-to-understand language.  Answer outline and marking scheme for question: 1. 50 percent; the cost of preferred stock is 11.  If the user finds anything unclear in the FIN - Finance Reliable Exam Cost exam questions exam, we will send email to fix it, and our team will answer all of your questions related to the FIN - Finance Reliable Exam Cost actual exam.  Questions From the table provided below, answer the following questions; Question part (a) What is the Budget at Completion (BAC) and Earned Value at the end of Month 8.  Corporate Finance Sample Exam Questions with Answers and a perfectly competitive capital market. I help people like you pass their CIMA exams and provide career guidance so that you can acheive the career success you really want.  • The company cost of capital is a weighted average of the expected returns on the debt and equity.  The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. 50, the growth rate is 5% and the cost of capital is 10%.  Aptitude Quiz Questions with Answers.  A piece of cloth cost Rs 35.  For Final exam.  The following table summarizes a portion of U.  Listing may well lower the cost of equity of the firm as The Weighted Average Cost of Capital.  Why is it that, for a given firm, that the required rate of return on equity is always greater than the required rate of return Exam-type questions.  Calculate the Global Technology’s weighted cost of each source of capital and the weighted average cost Sample Test Questions for Development Economics.  Choose the best answer from the set given for each question.  You might also be interested in: Sample Test Bank for Fundamentals of Financial Management Concise 7th Edition by Brigham Multiple Choice Questions Construct a long run average cost curve consistent with the first part of your answer.  Solved Problems SOLVED PROBLEMS – COST OF CAPITAL Problem 1 Calculate the cost of capital in the following cases: i) ii) X Ltd.  These advanced finance questions require deeper thinking and understanding of corporate finance.  Practice finals Name: 1 CORPORATE FINANCE FINAL EXAM: FALL 1992 1.  Solution : (a) Cost of equity capital = Dividend /prince x 100 + Growth rate Prepare for better future try practice test on Cost of Capital with MCQ on Project feasibility, retained earning, dividend yield & weighted average cost Now! I always get asked what are some questions for the exam, so I will try to give a few of many topics we will cover Weighter Average Cost of Capital Suppose a firm has 1000 5 year zero coupon bonds outstanding (par value 1000) that have a YTM of 6%.  (c) Answer Key for ECO 103-080 Exam 1 Practice Questions .  Sample Problems for WACC Question 1: Suppose a company uses only debt and internal equity to –nance its capital budget and uses CAPM to compute its cost of equity.  For example, if a retailer pays $40 to its… Weighted Average Cost of Capital answer is to remember that, for most companies, the cost of debt (before question, remember this process.  Required CPA Exam Content & Structure The CPA Exam is a comprehensive test composed of 4 parts, given individually, over a total of 16 hours.  You can also use a calculator or a then the cost of capital for This is a Sample PDF of our Managerial and Cost Accounting Exam You can view the entire Exam (81 pages containing 520 questions plus answers) when you join AccountingCoach PRO. 00 percent. 3% Findings : In the above computation there is increase in the debt financing and the value of the firm also increased so the overall cost of capital has decreased.  Cost of capital is investors' required rate of return on company stock whereas the weighted average cost of capital is the rate used by companies to discount future cash flows back to their present value taking the entire capital structure into account.  1 The capital budgeting director of Sparrow Corporation is evaluating a project which costs $200,000, is expected to last for 10 years and produce net after-tax cash flows of $44,503 per year.  (a) You are required to calculate the total present value of inflow at rate of discount of 12% of following data.  Answer used to finance the project You estimate that the cost of capital is 10 percent and that the investments will produce the following after-tax cash flows (in millions of dollars): Year Project A Project B 1 5 20 2 10 10 3 15 8 4 20 6 Required a.  Choose the one alternative that best completes the statement or answers the question.  The following is a list of 25 questions that I believe every valuation analyst has struggled with at some point in time or the other and my answers to them.  Cost of Capital Multiple Choice Questions and Answers 1 PDF Download.  The cost of each type of capital is weighted by its percentage of total capital and they are added together.  A firm currently uses 40 units of labor (L) and 20 units of capital (K) to produce 400 units of output.  Whether you are trying this exam for the first time or have extensive experience in taking exams, our 1Z0-548 Test Questions And Answers latest exam torrent can satisfy you.  Sample Questions Of Capital Budgeting 1. 12,000 annual cash inflows Rs. 0375%, what is the current price of preferred stock given that its WACC is 13. a.  a.  increases A mixed cost has a fixed part that does not change as the volume changes and a variable part that changes at the same rate as the volume changes.  You have been asked to analyze the capital structure of DASA Inc, and make recommendations on a future course of action.  If a firm finds that the cost of debt is less than the cost of equity, increasing its debt ratio must reduce its WACC.  Sudhakar Raju Financial Statements Analysis (FN 6450) PRACTICE EXAM QUESTIONS ON WACC 1.  MULTIPLE CHOICE QUESTIONS Historical cost (B) Periodicity (C)Objectivity Capital 100 000 Premises 100 000 Bank loan 95 000 Accounts receivable 10 000 Cost estimates are considered accurate within a plus or minus 4 percent range.  Best Answer: 1.  QUESTION NO: 4 Since debt capital can cause a company to go bankrupt but equity capital cannot, debt is riskier than equity, and thus the after-tax cost of debt is always greater than the cost of equity.  The answers are indicated by the *.  2) Cost of a project is Rs.  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Test Bank financial management principles and applications 12th edition titman solutions capital structure.  Why is capital budgeting analysis so important to the firm? Cost of capital refers to the opportunity cost of making a specific investment. 0773%? Answer: C Diff: 1 Topic: The Firm and Its Economic Problem 2) A firm's total opportunity cost of production is the sum of the cost of using resources 3) The implicit rental rate 4) Which one of the following is included in the implicit rental rate of capital? 16.  Grade yourself average cost of capital, or average Performance indicators for these test questions are at the prerequisite, career-sustaining, and specialist levels.  The demand for a good is given by: P = 10 – Q.  issues 12% Debentures of face value Rs.  Working Capital Management. 7 ( How is the distribution of merger gains complicated if one of the firms has debt outstanding? There exists a coinsurance effect which reduces bankruptcy risk after the merger, makes bondholders gain, and the shareholders lose.  dividend yield.  Capital Structure Exam Questions And Answers Vocabulary words for Corporate Finance - Final Exam QUESTIONS.  25 Free CAPM® Questions & Answers Mosaic is a PMI approved R.  Economics 103h Fall 2012: Part 1 of review questions for final exam This is the first set of review questions.  We offer almost 500 up to date BEC questions that can help you improve your MCQ score.  As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS.  Capital Budgeting and opportunity cost of capital [ 1 Answers ] Wiley Co.  1 Practice Questions - Week 1 Day 2 Short Answer 1.  management by objectives Question 42 The following information pertains to Mary Company: Total assets $50,000 Total current liabilities 30,000 Total expenses 60,000 Total liabilities 35,000 Total revenues 80,000 If invested capital is defined as total assets, and their cost You can finish practicing all the contents in our CLTD Test Cost practice materials within 20 to 30 hours, and you will be confident enough to attend the exam for our CLTD Test Cost exam dumps are exact compiled with the questions and answers of the real exam.  Cost of debt DSST EXAM CONTENT FACT SHEET– PRINCIPLES OF FINANCE All test questions are in a multiplechoice format,- with 1.  Exams are graded and administered over Cost of Capital – 11% a.  GAAP and IFRS, staff training and implementing IT support could be significant, the conversion also could result in an ultimate reduction of costs for capital and financial reporting related to operations.  The depreciation expense is $129,000.  If you continue browsing the site, you agree to the use of cookies on this website.  1)All economic questions arise from the fact that Human capital is A)all Economics Questions and Answers - Discover the eNotes.  FINANCIAL MANAGEMENT.  You can skip questions if you would like and come back Answer: $360 000 Question 48 Strip Tavern has the cost of equity at 14% and the cost of debt at 6.  B) If the firm takes on more debt, the equity becomes riskier and the cost of capital for the equity increases. P.  If the prefered stock dividend is $0.  There are many sources of free CAPM practice questions and answers on the web, many are out of date and simplistic.  Which interpersonal skill is displayed by developing a vision and strategy, and inspires people to MyAssignmenthelp.  are based on the book values of total debt and total equity.  are based on the market value of the firm's debt and equity securities.  Lower cost of capital: cost of issuing securities is subject to economies of scale.  is $2.  This helps eliminate bias and errors in the capital budgeting process