cfa一级corporatefinance∶corporateinvestingandfinancingdecisions(编辑修改稿)

cfa一级corporatefinance∶corporateinvestingandfinancingdecisions(编辑修改稿)内容摘要：

ent decision should be made assuming a weighted average cost of capital including each of the different sources of capital and longrun target weights. Question ID: 24930 National Auto uses debt, preferred stock, and mon stock to finance operations. Calculation of the cost of capital requires identification of the: 10 A. riskfree rate. B. present value of the project to be financed. C. percentage of financing ing from each financing source. D. pany39。 s product. Explanation: Correct answer: C The weighted average cost of capital is a weighted average of the marginal costs of each relevant ponent. The weights are based on the percentage each particular ponent represents in the firm’s capital structure. Those sources providing more financing of firm assets have a greater weight in calculation of the firm’s cost of capital. The riskfree rate only has an impact in that it serves as a consideration of lenders in assigning an interest rate to the firm. The present value is used in capital budgeting decisions. Question ID: 17268 Which of the following influence the cost of capital? A. All of these choices are correct. B. General economic conditions. C. Marketability of securities. D. Amount of financing the firm requires. Explanation: Correct answer: A 11 b: Define and calculate the ponent cost of: 1) debt 2) preferred stock 3) retained earnings (3 different methods) and 4) newly issued stock or external equity. Question ID: 17280 An analyst has gathered the following information about a pany:  stocks sells for $50 per share  last dividend (D0) was $  growth rate is a constant 5 percent  the pany would incur a flotation cost of 15 percent if it sold new mon stock  ine for the ing year is expected to be $500,000  the firm39。 s payout ratio is 60 percent  its mon equity ratio is 30 percent If the firm has a capital budget of $1,000,000, what ponent cost of mon equity will be built into the weighted average cost of capital for the last dollar of capital the pany raises? A. % B. % C. % D. % Explanation: Correct answer: A ke = [D1/(Po(1F))] + g D1(2)() = ke = [(50 (1 .15))] + .05 = + .05 = + .05 = .0494 + .05 = .0994or % 50(.85) 12 Question ID: 17269 A pany has $5 million in debt outstanding with a coupon rate of 12 percent. Currently the YTM on these bonds is 14 percent. If the tax rate is 40 percent, what is the after tax cost of debt? A. %. B. %. C. %. D. %. Explanation: Correct answer: D (.14)() Question ID: 17277 If the FED caused the riskfree rate to increase, we would expect the cost of capital to: A. remain unchanged. B. increase. C. need more information to answer question. D. decrease. Explanation: Correct answer: B Question ID: 17272 13 The expected dividend is $ for a share of stock priced at $25. What is the cost of equity if the longterm growth in dividends is projected to be 8 percent? A. 15%. B. 18%. C. 19%. D. 16%. Explanation: Correct answer: B Ks = (D1 / P0) + g. c: Define the target (optimal) capital structure. Question ID: 24942 The weights used to calculate the firm’s current capital structure for parison to the target capital structure should be based on the: A. book value of the firm39。 s securities if share prices are significantly lower than book values. B. book value of the firm39。 s securities if share prices significantly exceed book values. C. market value of the firm39。 s securities. D. initial public offering price for stock, and par value for bonds. Explanation: Correct answer: C 14 Market values are an indication of what creditors and shareholders are currently investing into the firm and are likely reflective of what the firm would receive if new financing we undertaken today. Using book value figures is appropriate only when book values approximate market values. Question ID: 17281 An analyst gathered the following data about a pany: Capital Structure Required Rate of Return 30 percent debt 10 percent for debt 20 percent preferred stock 11 percent for preferred stock 50 percent mon stock 18 percent for mon stock Assuming a 40 percent tax rate, what aftertax rate of return must the pany earn on its investments? A. %. B. %. C. %. D. %. Explanation: Correct answer: A (.3)(.1)() + (.2)(.11) + (.5)(.18) Question ID: 24941 Using an optimal capital structure will: A. maximize earnings per share. B. minimize the stock price. C. maximize the stock price. 15 D. maximize revenues. Explanation: Correct answer: C Using the right bination of the financing ponents will maximize the pany’s stock price. Above normal usage of debt would be a cheaper method of financing, but it would increase the risk of the firm. The optimal capital structure seeks a balance between risk and return that maximizes the value of the pany. Revenues are based on the demand for products and services produced by the firm’s assets, regardless of how they were financed. Earnings per share are a result of all of the firm’s activities and may or may not be materially influenced by the firm’s capital structure. d: Define and calculate a pany39。 s weightedaverage cost of capital. Setup Text:  The pany has a target capital structure of 40 percent debt and 60 percent equity.  Bonds pay 10 percent coupon (semiannual payout), mature in 20 years, and sell for $.  The pany stock beta is .  Risk free rate is 10 percent, and market risk premium is 5 percent.  The pany is a constant growth firm that just paid a dividend of $, sells for $ per share, and has a growth r。