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NEW QUESTION: 1
Gulf Electric Company (GEC) uses only debt and equity in its capital structure. It can borrow unlimited amounts at an interest rate of 10 percent so long as it finances at its target capital structure, which calls for
55 percent debt and 45 percent common equity. Its last dividend was $2.20; its expected constant growth rate is 6 percent; its stock sells on the NYSE at a price of $35; and new stock would net the company $30 per share after flotation costs. GEC's tax rate is 40 percent, and it expects to have $100 million of retained earnings this year. GEC has two projects available: Project A has a cost of $200 million and a rate of return of 13 percent, while Project B has a cost of $125 million and a rate of return of 10 percent. All of the company's potential projects are equally risky. What is GEC's cost of equity from newly issued stock?
A. 12.29%
B. 13.77%
C. 13.33%
D. 12.66%
E. 10.00%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
k(d) (interest rate on the firm's new debt) = 10%
k(d)(1 - T) (after-tax-component cost of the debt) = 10%(0.6) = 6%.
D/A = 55%; D0 = $2.20; g = 6%; P0 = $35; PN = $35; T = 40%.
Retained earnings = $100M; BP(RE) = $100M/ .45 = $222.22M.
k(s) (component cost of retained earnings) = $2.33/$35 + 6% = 12.66%.
k(e) (component cost of external equity) = $2.33/$30 + 6% = 13.77%.
NEW QUESTION: 2
You have been tasked with testing a CAT5e cable. A summary of the test results can be found on the screen.
Step 1: Select the tool that was used to create the cable test results.
Step 2: Interpret the test results and select the option that explains the results. After you are done with your analysis, click the 'Submit Cable Test Analysis' button.
Answer:
Explanation:
Explanation:
A Cable Certifier provides "Pass" or "Fail" information in accordance with industry standards but can also show detailed information when a "Fail" occurs. This includes shorts, the wire pairs involved and the distance to the short. When a short is identified, at the full length of the cable it means the cable has not been crimped correctly.
NEW QUESTION: 3
SW-C has just been added to the network shown in the graphic.
What is the purpose of assigning a default gateway to this switch?
A. allows connectivity to Router B from the switch prompt
B. allows connectivity to remote network devices from Host B
C. allows console port connectivity to the switch from Host A
D. allows the switch to pass traffic between Host A and Host B
Answer: A
Explanation:
Explanation/Reference:
Explanation: