From the Following Data,calculate the Company's Cost of Capital: Annual

question 5

Multiple Choice

From the following data,calculate the company's cost of capital: annual earnings = $0.2 million,total market value of company = $0.5 million,total value of debt = 0,interest on debt = 12% p.a.

• A)28%
• B)4.8%
• C)12%
• D)40%

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Definitions:

Availability Heuristic

A cognitive heuristic that depends on readily accessible examples in an individual's memory when assessing a particular subject, idea, technique, or choice.

Mood-Congruent Memory

The tendency to recall memories that are congruent with one's current mood, enhancing the mood's effects on memory recall.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when explaining others' behaviors.

Dispositional Attribution

The process of attributing behavior to the internal characteristics or disposition of the individual rather than to external factors.