Cayo Company Is Financed Entirely by Common Stock Which Is

question 78

Multiple Choice

Cayo Company is financed entirely by common stock which is priced to offer a 10% return.If the company repurchases 40% of the stock and substitutes an equal value of debt costing 7%,what is the cost on the common stock after repurchasing?

• A) 10%
• B) 18%
• C) 12%
• D) None of the above

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Definitions:

Shaping

A conditioning procedure used in behavioral psychology to establish a new behavior by rewarding closer approximations of the desired behavior.

Desired Behavior

Refers to the specific actions or reactions that an individual or group aims to elicit through various means, including instruction, training, or behavioral modification techniques.

Praises

Expressions of approval or admiration directed towards someone for their achievements or qualities.

Scheme For Infants

A plan or strategy in developmental psychology that refers to how infants organize their physical activities and routines.