A Firm Has 4,000,000 Shares of Common Stock Outstanding, Each

question 110

Multiple Choice

A firm has 4,000,000 shares of common stock outstanding, each with a market price of $12.00 per share. It has 25,000 bonds outstanding, each selling for $980 (with a face value of $1,000) . The bonds mature in 20 years, have a coupon rate of 9 percent, and pay coupons semiannually. The firm's equity has a beta of 1.5, and the expected market return is 21 percent. The tax rate is 21 percent and the WACC is 15 percent. What is the risk-free rate?

• A) 7.12 percent
• B) 6.28 percent
• C) 9.22 percent
• D) 19.36 percent

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Definitions:

Voltage-gated Ion Channels

Channels that open or close in response to changes in membrane potential, allowing ions to pass through the membrane.

Presynaptic Terminal

The end part of an axon from which the release of neurotransmitters happens to signal the next neuron across a synaptic gap.

Synapse

The junction between two neurons where electrical or chemical signals are transmitted from one neuron to another.

Neuromuscular Junctions

Specialized synapses between motor neurons and muscle fibers, enabling signal transmission for muscle contraction.