1. (TCO 8) If the financial markets are strong form efficient, then: (Points : 4

Question

1. (TCO 8) If the financial markets are strong form efficient, then: (Points : 4)
only the most talented analysts can determine the true value of a security.
only company insiders have a marketplace advantage.
technical analysis provides the best tool to gain a marketplace advantage.
no one person has an advantage in the marketplace.
every security offers the same rate of return.


2. (TCO 5) Royal Petroleum Co. can buy a piece of equipment that can be financed with debt at a cost of 9 percent (after-tax) and common equity at a cost of 16 percent. Assume debt and common equity each represent 50 percent of the firm's capital structure. What is the weighted average cost of capital? (Points : 4)
between 4.5% and 8%
more than 13%
between 12 and 13%
between 13 and 14%
none of the above

Explanation / Answer

between 12 and 13%

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