Use the Following Information to Answer the Question(s)below

question 15

Multiple Choice

Use the following information to answer the question(s) below. The risk-free rate of interest is 3% and the market risk premium is 5%.
-The overall cost of capital for Wyatt Oil is closest to:

• A)8.1%.
• B)8.5%.
• C)8.8%.
• D)9.3%.

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Definitions:

Relative and Absolute Terms

Concepts used to compare differences in terms of relationships or ratios (relative) and fixed values or units (absolute).

Social Security

A government system that provides monetary assistance to people with an inadequate or no income, particularly the elderly, disabled, and families with dependent children.

Workers

Individuals engaged in a task or activity, especially for earning wages or a salary.

Income Earners

Individuals or entities that receive earnings from work, investments, or other sources.