For an Unlevered Firm, the Cost of Capital Can Be

question 4

Multiple Choice

For an unlevered firm, the cost of capital can be determined by using the ________.

• A) yield on the traded debt
• B) Capital Asset Pricing Model
• C) dividend yield
• D) preferred stock yield

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Definitions:

Bill of Exchange

A written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), to a third party (the payee) or to bearer.

Draft

A draft refers to the compulsory enrollment of individuals into military service, or can refer to the preliminary version of a document or plan.

Payee

The person or entity to whom a check, draft, or promissory note is made payable.

UETA

The Uniform Electronic Transactions Act is a law adopted by most U.S. states that establishes the legal validity of electronic signatures and records.