Corporation X Needs $1,000,000 and Can Raise This Through Debt

question 65

Multiple Choice

Corporation X needs $1,000,000 and can raise this through debt at an annual rate of 10 percent, orpreferred stock at an annual cost of 7 percent. If the corporation has a 40 percent tax rate, theafter-tax cost of each is

• A) debt: $60,000; preferred stock: $42,000.
• B) debt: $60,000; preferred stock: $70,000.
• C) debt: $100,000; preferred stock: $70,000.
• D) debt: $100,000; preferred stock: $42,000.

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Definitions:

Insertion Sort

Insertion sort is a simple sorting algorithm that builds the final sorted array (or list) one item at a time by repeatedly picking the next item and inserting it into the correct position among the already sorted items.

Key Comparisons

Evaluations performed to determine the relative order of data elements, typically used in sorting and searching algorithms.

Item Assignments

The process of assigning values or objects to variables or to positions in a data structure.

Binary Search

A search algorithm that finds the position of a target value within a sorted array by repeatedly dividing the search interval in half.