Tangerine Inc

question 32

Multiple Choice

Tangerine Inc.'s target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm's marginal tax rate is 40 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find the cost of retained earnings. Which of the following is Tangerine's component cost of retained earnings?

• A) 8 percent
• B) 10 percent
• C) 12 percent
• D) 14 percent
• E) 16 percent

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Definitions:

Rape Charges

Legal accusations made against an individual for the act of non-consensual sexual intercourse.

Quasi-experimental Study

A research method that examines the effects of an intervention or treatment without the use of random assignment.

Experimental Control

The practice of minimizing variables other than the independent variable in an experiment to ensure that the outcome is directly related to the variable being tested.

Independent Variable

In an experimental setting, the variable that is manipulated by the researcher to observe its effect on the dependent variable.