Consider the Following: the Market Value of Luke-I-Am-Your-Father Stock Is

question 11

Multiple Choice

Consider the following: the market value of Luke-I-am-your-father stock is $60 a share (with 2,000,000 shares outstanding and the next annual dividend is expected to be $1.50) ,the bonds are currently selling for $1050 (semi-annual coupon payments of $45; maturing in 20 years; 10,000 bonds in the market) ,the preferred stock currently is $10 per share (paying dividends of $.50 in perpetuity,100,000 shares outstanding) ; if the tax rate is 40%,what is the firm's WACC?

• A) 2.50%
• B) 3.00%
• C) 5.33%
• D) 2.73%

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Definitions:

Moral Absolutism

The ethical belief that there are absolute standards against which moral questions can be judged, and that certain actions are right or wrong, regardless of the context of the act.

Ethical Absolutism

The philosophical viewpoint that certain actions are absolutely right or wrong, regardless of the context or circumstances.

Cultural Relativism

The belief that a person's beliefs, values, and practices should be understood based on that person's own culture, rather than judged against the criteria of another.

Ethicists

Scholars who study and analyze moral principles and how they apply to behavior.