E-PolyLearning

1. During the planning period, a marginal cost for raising a new debt is classified as
a. debt cost
b. relevant cost
c. borrowing cost
d. embedded cost
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Answer: (b).relevant cost

2. The cost of common stock is 14% and the bond risk premium is 9% then the bond yield will be
a. 0.0156
b. 0.05
c. 0.23
d. 0.6428
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Answer: (b).0.05

3. In weighted average cost of capital, a company can affect its capital cost through
a. policy of capital structure
b. policy of dividends
c. policy of investment
d. all of the above
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Answer: (d).all of the above

4. A risk associated with the project and the way considered by well diversified stockholder is classified as
a. expected risk
b. beta risk
c. industry risk
d. returning risk
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Answer: (b).beta risk

5. The cost of common stock is 13% and the bond risk premium is 5% then the bond yield would be
a. 18
b. 0.026
c. 0.08
d. 0.18
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Answer: (c).0.08

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