Quiz Ch 12 – Factors Impacting Cost of Equity
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition
Considering all else held constant, which of the following factors will increase the cost of equity?
Considering all else held constant, which of the following factors will increase the cost of equity?
Which factor influences the capital structure weights used in computing a firm’s weighted average cost of capital (WACC)?
What factor is most likely to lead a wise manager to increase the cost of capital for a project in a levered firm?
What is the term that describes the evaluation approach used by Farmer’s Supply to determine the discount rate for assessing the proposed clothing store expansion?
When applying the pure play approach to assign a cost of capital to a proposed investment, which characteristic should be given the most focus when searching for an appropriate pure play firm?
What is the term for the rate of return required by Lester and other lenders who purchased bonds issued by The Corner Store?
What term is used to describe the return that Katie and other shareholders require on their investment in ABC stock?
What effect does an increase in a levered firm’s tax rate have?
If a firm uses its weighted average cost of capital (WACC) as the required return for all of its investments, what would be the likely outcome?
What is the appropriate required return for a proposed project in Division A of Marine Expeditors, relative to the firm’s weighted average cost of capital?