A Firm Requires an Investment of $30 000 and Borrows

question 1

Multiple Choice

A firm requires an investment of $30 000 and borrows $10 000 at 6%. If the return on equity is 15%, what is the firm's pre-tax WACC?

• A)11%
• B)12%
• C)14%
• D)13%

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Definitions:

Fixed Interval Schedule

A type of conditioning schedule where rewards (reinforcements) are provided at fixed time intervals, regardless of the behavior's occurrence.

Reinforcement Theory

A psychological perspective emphasizing that behavior can be shaped by controlling the outcomes and consequences of that behavior.

Behavior

Actions, reactions, or conduct of individuals, often studied in psychology and behavioral sciences.

Agency Theory

A principle that describes the relationship between principals (such as shareholders) and agents (such as company executives), focusing on the contracts and costs involved in resolving conflicts of interest.