Flintstone Mining Inc

question 10

Multiple Choice

Flintstone Mining Inc.has a weighted average cost of capital of 12%.Flintstone has 40% debt in its capital structure (debt-to-equity is 0.67) and the yield on Flintstone bonds is 6%.The corporate tax rate is 40%.What is the cost of equity for Flintstone?

• A) 12.6%
• B) 14.6%
• C) 15.6%
• D) 16.6%
• E) 17.6%

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Definitions:

Blocking

A learning process where the presence of an established conditioned stimulus interferes with the learning of a new conditioned stimulus.

Salience

The quality of being particularly noticeable or important; the state or condition by which something stands out from its surroundings or background in perception.

Behavioral Contrast

A phenomenon in which the rate of response varies according to a change in the reinforcement of an alternative behavior.

Counterconditioning

A behavioral therapy technique that involves teaching the subject to associate a positive response with a stimulus that previously elicited a negative response.