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NEW QUESTION: 1
A firm's cost of equity is 12%, which reflects a 4% premium over the cost of its long-term debt. The firm has an EBIT of 27,900 and has 65,000 in debt. The firm is planning to increase its debt by 15,000, which will raise the cost of debt by 1% for the additional amount. What is the change in the company s pre tax profit due to the additional debt?
A. -5.29%
B. -8.81%
C. -5.95%
Answer: C
Explanation:
Cost of debt = Cost of equity - Risk premium = 12 - 4 = 8%. Current PBT = 27,900 - 0.08 x
6 5,000 = 27,900 - 5,200 = 22,700 Cost of additional 15,000 in debt is 9% (= 8 + 1). New PBT = 27,900 -
0 .08 x 65,000 - 0.09 x 15,000 = 27,900 - 6,550 = 21,350 Change in PBT = (21,350 - 22,700) / 22,700 =
-0.0595, or -5.95%

NEW QUESTION: 2
Which term refers to an endpoint agent that tries to join an 802 1X-enabled network?
A. client
B. authenticator
C. supplicant
D. EAP server
Answer: B

NEW QUESTION: 3

A. Capitalize
B. Hidden
C. Line-through
D. Italic
Answer: A

NEW QUESTION: 4
What is the correct description of the relationship between ManageOne ServiceCenter and FusionSphere OpenStack model?
A. SC : Organization<->OpenStack : Domain
B. SC : VDC<->OpenStackt : Domain
C. SC : VPC<->OpenStackt : Project
D. SC : vRouter<->OpenStackt : Project
Answer: A

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