The cost of capital is the rate of return of a company must earn on investment to maintain ----------------

Related MCQs

• ----- is the rate of return that the company must earn on the net funds raised, in order to satisfy the equity shareholders’ demand for return
• If risk free rate of return is 8%, Return on market portfolio is 12%, beta = 1.5, then the expected rate of return according to CAPM is equal to
• Minimum Rate of Return that a firm must earn in order to satisfy its investors, is also known as:
• A project requires an investment of Rs500000and has scrape value of Rs.20000 after five years. It is expected to yield profits after depreciation and taxes during the five years amounting to Rs.40000,Rs60000, Rs.50000,Rs70000 and Rs20000.What is the average rate of return on the investment?
• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• A company should arrange the capital structure in such a way that there is maximum flexibility in the capital and cost of capital is
• Lei-Feng, Inc.'s $100 par value preferred stock just paid its $10 per share annual dividend. The preferred stock has a current market price of $96 a share. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .
• A company has earnings before interest and taxes of Rs1,00,000. It expects a return on investment at a rate of 12.5%. What is the total value of the firm according to MM Theory?
• The common stock of a company must provide a higher expected return than the debt of the same company because
• In optimal capital structure the company’s cost of capital will be