# International Capital Structure And The Cost Of Capital This question bank verified by Studydeets
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Question 1
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## The cost of capital is

the minimum rate of return an investment project must generate in order to pay its financing costs.

the minimum rate of return an investment project must generate in order to pay its financing costs plus a reasonable profit.

the maximum rate of return an investment project must generate in order to pay its financing costs.

the maximum rate of return an investment project must generate in order to pay its financing costs plus a reasonable profit.

Question 2
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Multiple Choice

## For a firm that has both debt and equity in its capital structure,its financing cost can be represented by the weighted average cost of capital that is computed by

weighing the pre-tax borrowing cost of the firm and the cost of equity capital, using the debt as the weight.

weighing the after-tax borrowing cost of the firm and the cost of equity capital, using the debt as the weight.

K = (1 - )Kl + (1 - )i where: b) and c)

Question 3
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Multiple Choice

## In the notation of the book,K = (1 - )Kl +  (1 - )i Which of these are correct?

The debt-to-equity ratio is

The tax rate is

The after-tax cost of debt capital is i

All of the above

Question 4
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Multiple Choice

## In the notation of the book,K = (1 - )Kl +  (1 - )i Which of the following are correct?

The debt-to-total market value ratio is

The tax rate is i

The after-tax cost of debt capital is i

All of the above

Question 5
Free
Multiple Choice

## In the notation of the book,K = (1 - )Kl +  (1 - )i Which of the following are correct?

The debt-to-equity ratio is

The cost of equity capital for a levered firm is K

The pre-tax cost of debt capital is i

All of the above

Question 6
Multiple Choice

## In the notation of the book,K = (1 - )Kl +  (1 - )i Which of the following are correct?

The debt-to-equity ratio is
The cost of equity capital for a levered firm is Kl
The after-tax cost of debt capital is i
All of the above
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Question 7
Multiple Choice

## In the notation of the book,K = (1 - )Kl +  (1 - )i Which of the following are correct?

The weighted average cost of capital for a levered firm is K
The tax rate is
The after-tax cost of debt capital is i
All of the above
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Question 8
Multiple Choice

## At the optimal capital structure,

K = (1 - )Kl + (1 - )i will be minimized.
The debt-equity ratio will be equal to the debt-to-value ratio.
K = (1 - )Kl + (1 - )i will be maximized.
None of the above
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Question 9
Multiple Choice

## Solve for the weighted average cost of capital: 8.67%
8.00%
7.60%
7.33%
7.14%
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Question 10
Multiple Choice

## Solve for the weighted average cost of capital: 8.67%
8.00%
7.60%
7.33%
7.14%
To unlock the question
Question 11
Multiple Choice

## Solve for the weighted average cost of capital: 8.67%
8.00%
7.60%
7.33%
7.14%
To unlock the question
Question 12
Multiple Choice

## Solve for the weighted average cost of capital: 8.67%
8.00%
7.60%
7.33%
7.14%
To unlock the question
Question 13
Multiple Choice

## Solve for the weighted average cost of capital: 8.67%
8.00%
7.60%
7.33%
7.14%
To unlock the question
Question 14
Multiple Choice

## Solve for the weighted average cost of capital: 7.00%
6.89%
6.73%
6.67%
6.57%
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Question 15
Multiple Choice

## Solve for the weighted average cost of capital: 7.00%
6.89%
6.73%
6.67%
6.57%
To unlock the question
Question 16
Multiple Choice

## Solve for the weighted average cost of capital: 7.00%
6.89%
6.73%
6.67%
6.57%
To unlock the question
Question 17
Multiple Choice

## Solve for the weighted average cost of capital: 7.00%
6.89%
6.73%
6.67%
6.57%
To unlock the question
Question 18
Multiple Choice

## Solve for the weighted average cost of capital: 7.00%
6.89%
6.73%
6.67%
6.57%
To unlock the question
Question 19
Multiple Choice

## Solve for the weighted average cost of capital: 8.67%
8.00%
7.60%
7.33%
7.14%
To unlock the question
Question 20
Multiple Choice