Answer:
Question 49Cadmium Electronics Inc. currently has a capital structure that is 40% debt and 60% equity. If the firm's cost of equity is 12%, the cost of debt is 8%, and the risk-free rate is 3%, what is the appropriate WACC?[removed] 9.2%[removed]
8.4%[removed]9.6%[removed]10.4% Multiple Choice Question 50Gangland Water Guns, Inc. has a debt-to-equity ratio of 0.5. If the firm's cost of debt is 7% and its cost of equity is 13%, what is the appropriate WACC?
[removed] 9% [removed] 10% [removed] 11% [removed] None of the above. Multiple Choice Question 66
The use of debt financing [removed] causes a manager to take on riskier projects in order to make interest payments. [removed] limits the ability of managers to waste stockholders’ money. [removed]
