Granite Works Maintains a Debt-Equity Ratio of 0

question 97

Multiple Choice

Granite Works maintains a debt-equity ratio of 0.65 and has a tax rate of 32 percent.The firm does not issue preferred stock.The pre-tax cost of debt is 9.8 percent.There are 25,000 shares of stock outstanding with a beta of 1.2 and a market price of $19 a share.The current market risk premium is 8.5 percent and the current risk-free rate is 3.6 percent.This year,the firm paid an annual dividend of $1.10 a share and expects to increase that amount by 2 percent each year.Using an average expected cost of equity,what is the weighted average cost of capital?

• A)8.44 percent
• B)8.78 percent
• C)8.96 percent
• D)9.13 percent
• E)9.20 percent

Understand the classification of labor costs into direct labor and indirect labor (manufacturing overhead).

Understand the impact of inventory accounting on financial statements.

Understand principles of safe medication administration and documentation.

Identify factors affecting drug metabolism and route of administration.

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Definitions:

Bicuspid

Referring to a tooth with two points (cusps), particularly the premolars in humans, or a valve with two flaps in the heart.

Left Ventricle

The chamber of the heart that receives oxygen-rich blood from the left atrium and pumps it to the body through the aorta.

Myocardial Infarction

A medical condition commonly known as a heart attack, which occurs when blood flow to a part of the heart is blocked for a long enough time that part of the heart muscle is damaged or dies.

Heart Muscle

The cardiac muscle tissue of the heart responsible for the contraction and relaxation that enables the heart to pump blood throughout the body.