Quiz Ch 14 – Cost of Equity in Relation to Debt-Equity Ratio
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
How is a firm’s cost of equity affected by a debt-equity ratio of 0.48?
How is a firm’s cost of equity affected by a debt-equity ratio of 0.48?
What term is used to describe corporations that retire a fixed portion of their long-term debt each year?
What does the true value of security refer to?
What factors should be considered when determining the appropriate discount rate for a capital project proposal?
How do flotation costs impact the evaluation of a project?
What influences the cost of capital when evaluating a capital project proposal?
Which action will reduce a firm’s cost of equity in the security market line approach, given a $2.40 annual dividend, a beta of 1.42, and all other factors remaining constant?
Which action will raise a firm’s cost of equity in the security market line approach, given a $3.36 annual dividend, a beta of 1.38, and all other factors remaining constant?
Which is the least likely to be a contributing factor to the existence of positive-NPV investments in product markets?
What actions does a firm take when using the subjective approach to project analysis?