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Question 46 A firm's cost of financing in an overall sense, is equal to its Not yet answered Points out of 1 Flag question Select one: O A weighted average cost of capital

Finance Nov 24, 2020

Question 46 A firm's cost of financing in an overall sense, is equal to its Not yet answered Points out of 1 Flag question Select one: O A weighted average cost of capital. O B. required tate of return that investors seek forvanous kinds of securities O C both of the above OD none of the above Question 47 A firm pays $3.00 in annual dividends on its preferred stock which is currently priced at $45.00. The firm's tax rate 40%. What is the firm's cost of preferred stock (p)? Not yet answered Points out of 1 Select one: O A. 2.67% Flag question OB. 4.00% C. 6.67% O D. 8,00% Question 48 Retained earnings has a cost associated with it because: Not yet answered Points out of 1 Flag question Select one: O A new funds must be raised O B. There is an opportunity cost associated with stockholder funds C. Ke > 9 O D. flotation costs increase the cost of funding

Expert Solution

Option C - All of the above

Firm's cost of financing is the return required by investors or weighted cost of capital

Q47 -

Firm's Cost of preferred cost = Dividend/ stock price

= $3/$45

= 6.67%

Option C

Q48 - Option B

Explanation: This represent the earnings forgone by the shareholders

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