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NEW QUESTION: 1
Intelligent Semiconductor is considering issuing additional common stock. The firm has an after-tax cost of debt of 8.55%, and the company's combined federal/state income tax is 35%. The risk-free rate of return is
5.6%, and the annual return on the broadest market index is expected to be 13.5%. Shares of Intelligent Semiconductor have a historical beta of 1.6. What is the cost of equity for this proposed common stock issue using the Capital Asset Pricing Model?
A. 18.24%
B. 4.09%
C. 7.04%
D. 5.56%
E. 12.64%
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The cost of issuing common stock can be calculated using several methods, including the Bond-Yield- Plus-Risk-Premium approach, Discounted Cash Flow method, or by using the Capital Asset Pricing Model.
The latter is illustrated in this example. To calculate the cost of common equity using the CAPM, use the following formula: {cost of common equity = [risk free rate of return + beta(expected return on the market - risk free rate of return)}. Incorporating the appropriate figures into this example will yield a cost of common equity at 18.24%.
NEW QUESTION: 2
A. Option C
B. Option B
C. Option A
D. Option D
Answer: B
NEW QUESTION: 3
From the Central Administration home page, click Monitoring and click View Health Reports. You have a Microsoft SQL 2008 server with a database that contains a table. The table can only be accessed by an active directory user account named user1. You need to ensure that the table can be used by an external content type. What should you do?
A. Create a new Managed Metadata Service application
B. Modify the permissions on the Business Data Connectivity service application.
C. Run the add-sp cmdlet
D. Create a new Secure Store Service.
Answer: B
Explanation:
BURGOS MNEMO: "Modify the permissions on the Business Data Connectivity"
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