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(The Following Information Applies to Problems 91, 92, 93, and 94.)

question 24

Multiple Choice

(The following information applies to Problems 91, 92, 93, and 94.)
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%.
-Which of the following is the best estimate for the weight of debt for use in calculating the WACC?

Evaluate the legal outcomes of non-conforming goods and the options available to buyers and sellers.

Comprehend the role and impact of negotiable and non-negotiable documents of title in goods transactions.

Identify conditions under which a title is considered void, voidable, or good.

Analyze the effects of ship-related risks on goods and the responsibilities of contracting parties.

Definitions:

Militant

Characterized by a vigorous and sometimes aggressive activism in support of a political or social cause.

Selma-to-Montgomery March

A series of three protest marches in 1965 that were instrumental in the passage of the Voting Rights Act, exemplifying the civil rights movement.

SNCC Worker

An individual associated with the Student Nonviolent Coordinating Committee, a civil rights group in the 1960s that played a major role in the struggle for racial equality in the United States.

Voting Rights

The entitlement of individuals to participate in the electoral process, often encompassing the right to vote in elections.