Assume That You Have Been Hired as a Consultant by CGT

question 7

Multiple Choice

Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and fertilizers, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below.
The stock is currently selling for $15.25 per share, and its noncallable
$1,000 par value, 20-year, 7.25% bonds with semiannual payments are selling for $875.00. The beta is 1.25, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. The firm's tax rate is 40%.
-What is the best estimate of the firm's WACC?

• A) 10.85%
• B) 11.19%
• C) 11.53%
• D) 11.88%
• E) 12.24%

Understand the ethical considerations in preparing application materials.

Master the modern methods of personal branding and online presence for job searching.

Comprehend the importance of networking and reciprocal relationships in professional settings.

Recognize the conventions and best practices for crafting effective résumés and application letters.

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Definitions:

Cultural Influence

The impact that a society's values, beliefs, and practices have on the behavior and attitudes of its members.

Mirror Neuron

A neuron that fires both when an individual acts and when the individual observes the same action performed by another, thought to be involved in learning through imitation.

Specific Action

A particular or distinct deed or movement carried out with a purpose in mind.

Amygdala

A region of the brain involved in processing emotions such as fear, anger, and pleasure.