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BUS 5440 Final Exam 2, Questions And Answers $10.49   Add to cart

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BUS 5440 Final Exam 2, Questions And Answers

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BUS 5440 Final Exam 2, Questions And Answers.Your test grade is 100% The professor has configured this test to allow students to: Show Questions Answered Correctly Show Questions Answered Incorrectly Show All Responses Selected By Student Show What The Correct Response Should...

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  • July 14, 2023
  • 9
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers
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Your test grade is 100%
The professor has configured this test to allow students to:

Show Questions Answered Correctly


Show Questions Answered Incorrectly


Show All Responses Selected By Student


Show What The Correct Response Should Be




QUESTION: 1
TYPE: MULTIPLE CHOICE
[QUESTION BANK ID: 269617]


CORRECT


Dobson Dairies has a capital structure which consists of 60 % long-term debt and 40 % common stock. The company’s CFO has obtained the
following information

The before-tax yield to maturity on the company’s bonds is 8 %


The company’s common stock is expected to pay a $3.00 dividend at year end (D 1 = $3.00), and the dividend is expected to grow at a constant rate of
7 % a year. The common stock currently sells for $60 a share

Assume the firm will be able to use retained earnings to fund the equity portion of its capital budget


The company’s tax rate is 40 %



What is the company’s weighted average cost of capital (WACC)?

A

12.00%


B

8.03%


C

9.34%


D

8.00%




E

7.68%




QUESTION: 2
TYPE: MULTIPLE CHOICE

,

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