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problem1: A corporation borrows 1 million dollars at ten percent annual rate of interest. The firm has 40 percent tax rate. The yearly, after tax cost of this debt is

[A] $100,000

[B] $166,667

[C] $40,000

[D] $60,000

problem2: The purpose of the stock split is to

[A] Reduce the price of the stock

[B] Reduce trading activity

[C] Issue additional shares

[D] Increase the dividend

problem3: The repurchase of stock _____________ the earnings per share and _______________ the market price of stock

[A] Increase, decrease

[B] Decrease, increase

[C] Increase, increase

[D] Decrease, decrease

problem 4: The cost of each type of capital depends on the

[A] Business risk of the firm

[B] Financial risk of the firm

[C] risk-free cost of that type of funds.

[D] all of the above

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916803

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