BA 323 BRINCKS EXAM 1 | ALL
QUESTIONS AND CORRECT
ANSWERS | GRADED A+ | NEWEST
VERSION | VERIFIED ANSWERS
Save
Terms in this set (85)
Why do we care WACC is necessary for making
about the investment decisions
weighted
average cost of
capital?
What are the Debt, preferred stock, and common
three main equity
sources of
capital for the
firm?
,What are the two short-term notes payable and long-
components of term debt
debt?
What are the two retained earnings and new common
components of stock
common equity?
Do we care After tax capital cost, interest is tax
about after-tax deductible
or pre-tax
analysis?
What are the Book value
three Market value
ways/methods Optimal capital structure
for determining
a company's
target weights?
What are the CAPM
three ways to DCF
determine the Bond-yield plus risk premium
cost of common
equity?
, If earning are retained, there is an
Why is there a
opportunity cost (the return that
cost for retained
stockholders could earn on
earnings?
alternative investments of equal risk)
Market conditions: interest rates,
What factors state of the economy
influence a Firm's capital structure, firm's
company's dividend policy, firm's investment
composite policy
WACC? Risk: riskier projects will increase a
firm's WACC
Should the No, because projects typically have
company use different riskiness
the composite
WACC as the
hurdle rate for
each of its
projects?
QUESTIONS AND CORRECT
ANSWERS | GRADED A+ | NEWEST
VERSION | VERIFIED ANSWERS
Save
Terms in this set (85)
Why do we care WACC is necessary for making
about the investment decisions
weighted
average cost of
capital?
What are the Debt, preferred stock, and common
three main equity
sources of
capital for the
firm?
,What are the two short-term notes payable and long-
components of term debt
debt?
What are the two retained earnings and new common
components of stock
common equity?
Do we care After tax capital cost, interest is tax
about after-tax deductible
or pre-tax
analysis?
What are the Book value
three Market value
ways/methods Optimal capital structure
for determining
a company's
target weights?
What are the CAPM
three ways to DCF
determine the Bond-yield plus risk premium
cost of common
equity?
, If earning are retained, there is an
Why is there a
opportunity cost (the return that
cost for retained
stockholders could earn on
earnings?
alternative investments of equal risk)
Market conditions: interest rates,
What factors state of the economy
influence a Firm's capital structure, firm's
company's dividend policy, firm's investment
composite policy
WACC? Risk: riskier projects will increase a
firm's WACC
Should the No, because projects typically have
company use different riskiness
the composite
WACC as the
hurdle rate for
each of its
projects?
