23. The total return on a stock comes from (2 points) a. dividend payments and c

Question

23. The total return on a stock comes from (2 points) a. dividend payments and changes in the stock price over the period you own it b. the stock's yield on its beta c interest payments d. the marginal tax rate on the company e. the due diligence value 24. Internal equity reflects a firm's ability to generate (2 points) a. bonds b. retained earnings c. new common stock d. efficient markets e. preferred stock 25. Investment analysts for Wall Street investment banks often calculate a company's target stock price (2 points) by using a. b. c. d. e. discounted payback (DPB) analysis discounted cash flow (DCF) analysis probability distribution matrices incidental cash flow (ICF) analysis beta standard deviation (BSD) analysis Optional Extra Credit Problems: You may recelve extra credit up to the polnts stated, which will be added to y final exam grade. Your total points on the final exam will count for 35% of the overall course grade. XCR1. Which of the following about weighted average cost of capital is correct? (check all that apply) (S poin WACC measures the after-tax cost of capital There is no cost to using retained earnings. Flotation costs can increase the weighted average cost of capital. Equity is always cheaper than debt. The cost of equity is a tax-deductible expense.

Explanation / Answer

Question 23) Answer = 23) Total return on stock come from = dividend payments and change in the stock price over the period you own it Answer = Option 1 Question 24) Answer = Option C = New Common Stock Question 25) Answer = Option B = Discounted cash Flow (DCF) analysis XC#1) Weighted average cost of Capital = WACC measures the after tax cost of capital

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