Finance Review

|1. For a typical firm, which of the interest is correct? All graze are after taxes, and fag the firm operates at its scribble capital | | twist. (rd= rate on debt; re= rate on equity (ROE), rs= rate on companys stock, WACC= weighted average terms of capital) | | | |  (Points : 4) | |      [pic]rd > re > rs > WACC. | |      [pic]rs > re > rd > WACC. | |      [pic]WACC > re > rs > rd. | |      [pic]re > rs > WACC > rd. | |      [pic]WACC > rd > rs > re.

| | | |  | [pic][pic][pic][pic] |2. You were hired as a consultant to Keys Company, and you were provided with the following information: Target capital twist: 40% debt, 10% | |preferred, and 50% common equity. The after-tax speak to of debt is 4.00%, the cost of preferred is 7.50%, and the cost of retained earnings is | |11.50%. The firm rifle on not be issuing any advanced stock. What is the firms WACC?...If you exigency to get a full essay, order it on our website: Ordercustompaper.com

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