There are multiple choice and some questions, like
- Which is true about common stock and preferred stock
- Common stock does not allow voting rights for the shareholder
- Preferred stock and common stock represent ownership in a Company
- For both, the investors return is tied to the performance of the Company and may result in a gain or loss
- All of the Above
- Both b and c
1. A Company has debt of 40% and equity of 60%. The cost of debt is 8% and the cost of equity is 6%. The risk free rate is 2%, beta is 1.2 and the marginal tax rate is 40%. What is the Companyâ€™s cost of debt? What is the Companyâ€™s cost of equity? What is the WACC?
I also post some example that the class mentioned.