For an Unlevered Firm,the Cost of Capital of the Firm

question 81

Multiple Choice

For an unlevered firm,the cost of capital of the firm 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:

Equipment

Tangible property used in operations, such as machinery and office hardware, which has a useful life longer than one year.

Income Statement

A financial report that shows the revenues, expenses, and profits or losses of a company over a specific period.

Balance Sheet

A financial report detailing a company's financial status at a certain moment, illustrating its assets, liabilities, and shareholders' equity.

Owner's Equity Statement

A financial document that outlines the changes in the ownership interest (equity) of a sole proprietorship or individual owner during a reporting period.