The Next Questions Refer to the Following

question 56

Multiple Choice

The next questions refer to the following.
A publicly traded firm has 4 million shares of stock outstanding, with a current share price of $50. The value of its plant and equipment is $250 million. Its profit annually is $50 million.
-The average cost of capital is approximately

• A) 5%
• B) 10%
• C) 15%
• D) 20%
• E) 25%

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Definitions:

Promoter

A person or company that finances or organizes events, especially in entertainment or sports.

Personally Liable

Being individually responsible for a debt or legal obligation, meaning personal assets can be used to satisfy the debt if necessary.

Personal Liability

The legal responsibility of an individual to pay debts from personal assets, not protected by a corporation or LLC.

Separate Bank Accounts

Individual bank accounts maintained by parties (such as spouses) for their personal use, distinct from joint accounts.